Amazon Prime incurs a huge fixed cost to obtain streaming rights to movies and television programs. However, it is able to spread this cost over a large number of subscribers that results in a cost-savings phenomenon referred to as

Question

Quizplus · Accepted Answer

Economies of scale occur when a company can spread its fixed costs over a larger number of units, resulting in a lower cost per unit. In this case, Amazon Prime is able to spread its fixed costs over a large number of subscribers, resulting in a lower cost per subscriber.

Amazon Prime Incurs a Huge Fixed Cost to Obtain Streaming