Economies of scale:

Question

Economies of scale:

Quizplus · Accepted Answer

Economies of scale refer to the cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale. They are indeed known as decreasing costs or increasing returns to scale (A), can be internal to the firm if the reduction in average costs is due to the expansion of the firm itself (B), and can be external when the reduction in a firm's average costs is due to the growth of the industry as a whole (C). They are also related to intra-industry trade, as firms and industries that experience economies of scale can trade similar but differentiated products, benefiting from specialization and large-scale production (D).

Economies of Scale