Economy of scale is the lowering of costs through production of larger quantities.

Question

Quizplus · Accepted Answer

Economies of scale refer to the cost advantage experienced by a firm when it increases its level of output. The advantage arises due to the inverse relationship between per-unit fixed cost and the quantity produced. The greater the quantity of output produced, the lower the per-unit fixed cost because these costs are spread out over a larger number of goods.

Economy of Scale Is the Lowering of Costs Through Production