Suppose that in 2012 ABC Corp. produced 500 million units of a good at an average cost of $2, and in 2013 ABC Corp. expanded its plant capacity and produced 600 million units at an average cost of $1.80. In this range, one can conclude that ABC Corp. is experiencing:
A. economies of scale.
B. diseconomies of scale.
C. neither economies of scale nor diseconomies of scale.
D. diminishing marginal product.
Answer: A
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