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In the long-run, a company that produces and sells popcorn incurs total costs of $1,150 when output is 70 canisters and $1,780 when output is 100 canisters. When this popcorn company increases production from 70 to 100 canisters, it exhibits

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abiolataiwo2015

When this popcorn company increases production from 70 to 100 canisters, it exhibits : economies of scale because average total cost is rising as output decrease.

Economies of Scale

The popcorn company will tend to exhibits economies of scales based on the fact if their is decrease of output the average total costs will increase or rise from :

ATC1 = 1150/70

ATC1= $16.43

TO

ATC2 = 1780/100

ATC2= $17.8 per unit

Therefore it exhibits economies of scale because average total cost is rising as output decrease.

Learn more about economies of scale here:https://brainly.com/question/780900

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