a firm average cost decreases in the longrun because?
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Correct Answer: Option C
Explanation:
In the long run, when all inputs under the control of the firm are variable, there is no fixed cost and thus no average fixed cost. Instead long-run average cost is affected by increasing and decreasing returns to scale, which translates into economies of scale and diseconomies of scale.
In the long run, when all inputs under the control of the firm are variable, there is no fixed cost and thus no average fixed cost. Instead long-run average cost is affected by increasing and decreasing returns to scale, which translates into economies of scale and diseconomies of scale.