Broston Inc., a bottling company, has state-of-the-art bottling and capping equipment in its manufacturing unit. The manufacturing unit is capable of producing double the quantity than required for the domestic market. The company plans to venture into the global market in order to maximize the utilization of the bottling plant and generate more revenue. This scenario reflects the concept of the _____.
A) theory of computation
B) theory of economies of scale
C) theory of spontaneous generations
D) theory of the international product life cycle

Question

Quizplus · Accepted Answer

The scenario reflects the theory of economies of scale, which suggests that as production increases, the cost per unit decreases, allowing the company to maximize utilization and generate more revenue.