Final answer:
Economies of scale imply lower average costs as output quantity increases, enabling firms to operate more cost-efficiently.
Explanation:
Economies of scale refer to the situation where, as the quantity of output increases, the cost per unit decreases. This concept allows a firm to produce at a lower average cost as it operates on a larger scale. For example, in industries like the refrigerator or newspaper industry where economies of scale exist, one firm can indeed produce more cheaply than two or more firms.
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