ECONOMICS

Detailed explanation-1: -Economies of scale refer to the property whereby long-run average total cost falls as the quantity of output increases.

Detailed explanation-2: -Answer and Explanation: When long-run average costs increase as output increases, there are constant returns to scale. They usually occur in the long-run when both capital and labour are variable.

Detailed explanation-3: -In the long run, firms can choose their production technology, so all costs become variable costs. Economies of scale refers to a situation where the average cost decreases as the level of output increases.

Detailed explanation-4: -Answer and Explanation: When long-run average costs decrease as output increases, there are economies of scale (A). Economies of scale are characterized by a rise in the level of output and a decrease in the long-run average cost.

Detailed explanation-5: -Economies of scale refer to these reduced costs per unit arising due to an increase in the total output. Diseconomies of scale, on the other hand, occur when the output increases to such a great extent that the cost per unit starts increasing.