Due to economies of scale, average costs decline as:

As production increases

Explanation:

Economies of scales is characteristic of certain business in which the average cost (the cost of every produced unit of an specific good or service, which equals total cost divided by all units produced) declines as the amount of the product increases. This happens for example, in business that have a high cost of initial investment and low operating cost. Because of the initial investment, the average cost of the first units (which is the result of dividing total cost into all the units that have been produced until that moment), is relatively high because there is a high investment divided into relatively few units of production. This cost decreases while product increases because the cost of investment is distributed into more units, and the operating cost do not increase cost substantially.