Concept:Economies of scale occur when a firm’s long-run average cost falls as its output expands.
Explanation:Increasing production allows the firm to spread fixed costs over more units and enjoy greater efficiency.
This causes the long-run average cost curve to slope downward.
Therefore, a firm experiencing economies of scale is one whose average cost decreases as production increases.
Option B refers to external benefits from other firms, not the usual meaning here.
Options C and D do not match the definition of economies of scale.
Answer:A. reducing average cost as production increases