Economies of scale in an industry refers to:
A) Savings that companies within the industry achieve due to increased volume
B) Declining average short run costs per unit
C) Improved contractual agreements with suppliers in the near term
D) Decreased barriers to entry to new firms attempting to enter the industry

Question

Quizplus · Accepted Answer

Economies of scale refer to the cost advantages that a business enjoys as it increases its level of output. This can be achieved through increased buying power, specialization of labor, and spreading of fixed costs over a larger output. As the volume of production increases, the cost per unit decreases, leading to increased profitability for the business.

Economies of Scale in an Industry Refers To