Cost reductions gained through mass-producing a standardized output are a source of scale economies.

Question

Quizplus · Accepted Answer

This statement is true. Scale economies refer to the cost advantages that come with increased production, and mass-producing a standardized output is a common way to achieve this. When a company produces more units of a product, it can spread its fixed costs over a larger number of units, which reduces the average cost per unit. Additionally, producing a standardized output allows for greater specialization and efficiency in the production process, further reducing costs.

Cost Reductions Gained Through Mass-Producing a Standardized Output Are a Source