In which condition, the average cost of a firm declines when output increases? Option 1: Marginal produvtivity. Option 2: Constant return to scale. Option 3: Decresing return to scale Option 4: Increasing return to scale.

The answer is 'Increasing return to scale.'. View full solution:

CUET Economics - In which condition, the average cost of a firm declines when output increases? | PYQs + Solutions

CUET Economics 2025 13 May Shift 2

Micro

Medium

Marginal produvtivity.

Constant return to scale.

Decresing return to scale

Increasing return to scale.

✅ Correct Option: 4

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