Question

It is common in large breweries for the long-run average total cost to decline as output increases. this indicates that many breweries operate with:

Answer 1

This indicates that many breweries operate with economies of scale.

Answer 2

They indeed indicate that many breweries operate with something called economies of scale but let me explain that a little further. Economies of scale is defined as a proportionate saving in costs gained by an increased level of production. Basically said is is the cost advantage that arises with increased output of a product. The basis for that is the principle that says the greater the quantity of a good produced, the lower the per-unit fixed cost.