A firm experiences economies of scale when
A. the average cost of producing a good decreases as the firm's output of the good decreases.
B. the average cost of producing a good increases as the firm's output of the good increases.
C. the average cost of producing a good increases as the firm's output of the good decreases.
D. the average cost of producing a good decreases as the firm's output of the good increases.
Answer: D. the average cost of producing a good decreases as the firm's output of the good increases.