GCEEconomicsProduction and Costs2020

Economies of scale occur when a firm experiences:

AIncreasing long-run average costs as output expands
BConstant returns to scale at all levels of output
CDecreasing long-run average costs as output expandsCORRECT
DDecreasing short-run marginal costs as output expands
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Why the answer is C, and why the others tempt you.
Economies of scale refer to the cost advantages a firm obtains as it increases its scale of production in the long run, resulting in a fall in long-run average costs. This is distinct from diseconomies of scale (rising long-run average costs) and is a long-run, not short-run, concept.
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