Economies of scale are cost savings achieved when an organization manufactures products in large volumes.

Question

Quizplus · Accepted Answer

Economies of scale occur when a company produces goods or services on a large scale, which reduces the average cost per unit. This is because fixed costs (such as the cost of machinery, buildings, and salaries) are spread out over a larger number of units, making each unit cheaper to produce. Therefore, it is true that economies of scale are cost savings achieved when an organization manufactures products in large volumes.

Economies of Scale Are Cost Savings Achieved When an Organization