There are many reasons why firms need to grow. Which of the following reasons is strongly influenced by economies of scale?
A) increasing profits
B) lowering costs
C) reducing risk
D) motivating managers

Question

Quizplus · Accepted Answer

Firms are motivated to grow in order to lower their cost. A larger firm may benefit from economies of scale, thus driving down average costs as their output increases.

There Are Many Reasons Why Firms Need to Grow