In which of the following circumstances can a firm best achieve economies of scale?

Question

Quizplus · Accepted Answer

Economies of scale refer to the cost advantage a company gains as it increases production. Spreading the costs of investments in plant and equipment across many sales is one way to achieve economies of scale as it reduces the average cost per unit of output. The other options (B, C, and D) do not necessarily guarantee economies of scale. While higher quality equipment might lead to better quality products, it might also increase production costs. Investing in research might lead to higher customer satisfaction but not necessarily cost savings. Highly customized products for a niche audience may not generate enough sales volume to yield economies of scale.

In Which of the Following Circumstances Can a Firm Best