Which one of the following is NOT a reason why there are economies of scale?
A) Better bargaining position and quantity discounts on purchased materials
B) Spreading fixed costs, such as depreciation and debt service, over more units
C) Finding process advantage by dedicating resources to individual products
D) Reduced construction costs by building smaller facilities

Question

Quizplus · Accepted Answer

Economies of scale refer to the cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale. Building smaller facilities would not contribute to economies of scale; instead, it would likely increase costs per unit.

Which One of the Following Is NOT a Reason Why