Firms are cautious about expanding since they don’t know…

Firms are cautious about expanding since they don’t know… Show more When there are large economies of scale: Firms are cautious about expanding since they don’t know if demand will be there. Firms are reluctant to expand because all the expansion costs come out of profits. Firms see that average cost of production remains constant as they expand in size. Firms are aggressive at expansion in part because cost efficiencies pay for part of the cost. • Show less

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