An aircraft company found that as it grew larger in size, it could reduce costs by buying larger, more specialized equipment and taking advantage of specialization of labor and management. This is an example of economies of scale.

Question

Quizplus · Accepted Answer

Economies of scale occur when a company can reduce its costs per unit due to increased production, often through more efficient production methods, specialized equipment, and labor specialization, as described in the scenario.

An Aircraft Company Found That as It Grew Larger in Size