Economies of scale _____.
A)exist when cost per unit increases with decrease in volume
B)are not more relevant in some industries than others
C)arise from the ability to spread fixed costs of production
D)produce cost advantages for smaller firms over larger firms

Question

Quizplus · Accepted Answer

Economies of scale arise from the ability to spread fixed costs of production. As the volume of production increases, the fixed costs can be spread over more units, leading to lower costs per unit. This makes it more cost-effective for larger firms to produce goods than smaller firms.

Economies of Scale _____