DP Economics Questionbank

Define the term economies of scale indicated in bold in the text (paragraph [3]).

Explain the reasons for the shape of the long-run average total cost curve.

Define the term increasing returns to scale.

Using the data in Table 1 to support your answer, identify how changes in inputs may result in constant returns to scale and in decreasing returns to scale.

Explain two factors that might give rise to economies of scale for a firm.