The reduction in average cost resulting from an increase in the volume of a good or services produced is called:
A)information cost
B)transaction cost
C)diminishing returns
D)economies of scale

Question

Quizplus · Accepted Answer

Economies of scale refers to the reduction in average cost resulting from an increase in the volume of a good or service produced. As the production volume increases, the average cost per unit decreases due to factors such as specialization of labor, bulk purchasing of materials and equipment, and increased efficiency in production processes.

The Reduction in Average Cost Resulting from an Increase in the Volume