Scale economies help explain why products are produced in a limited number of varieties in a country.

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Scale economies refer to the cost advantages that companies can achieve by increasing production levels. These economies of scale allow companies to produce more units at a lower unit cost. However, producing a broader range of products can lead to higher costs due to the need for specialized machinery, skilled labor, and management. As a result, companies often limit the number of varieties they produce in order to take advantage of scale economies and lower costs. Thus, scale economies help explain why products are produced in a limited number of varieties in a country.

Scale Economies Help Explain Why Products Are Produced in a Limited