Two companies are producing breakfast cereal. One company produces 10,000 boxes at an average cost of $1 per box. The other company produces 100,000 boxes at an average cost of $.75 per box. This example demonstrates the concept of
A) external strategies.
B) self-efficacy.
C) economies of scale.
D) geographic expansion.
E) growth vision.

Question

Quizplus · Accepted Answer

This example demonstrates economies of scale, where the larger company is able to produce at a lower cost per unit due to the higher volume of production.

Two Companies Are Producing Breakfast Cereal