It is common in large breweries for the long-run average total cost to decline as output increases. this indicates that many breweries operate with:

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Business

Kaiya Melton

28 February, 10:20

It is common in large breweries for the long-run average total cost to decline as output increases. this indicates that many breweries operate with:

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Aditya Koch · Answer 1

This indicates that many breweries operate with economies of scale.

Gracelyn Roach · Answer 2

They indeed indicate that many breweries operate with something called economies of scale but let me explain that a little further. Economies of scale is defined as a proportionate saving in costs gained by an increased level of production. Basically said is is the cost advantage that arises with increased output of a product. The basis for that is the principle that says the greater the quantity of a good produced, the lower the per-unit fixed cost.