Economies of scale refer to the fact that as the

Question

Quizplus · Accepted Answer

Economies of scale refer to the fact that as the quantity of product produced in a given time period increases, the cost of manufacturing each unit decreases. This happens because as production increases, fixed costs get spread across a greater number of units, resulting in a lower average cost per unit. Additionally, there may be opportunities to achieve cost savings through bulk purchasing, specialization of labor, and other factors. This concept is often used to explain why large companies are able to produce goods at a lower cost than small companies.

Economies of Scale Refer to the Fact That as the