Economies of scale result from
A)large fixed costs and/or weakly increasing variable costs
B)low fixed costs and/or strongly decreasing variable costs
C)large fixed costs and decreasing variable costs
D)low fixed costs and weakly increasing variable costs

Question

Economies of scale result from                          
A)large fixed costs and/or weakly increasing variable costs
B)low fixed costs and/or strongly decreasing variable costs
C)large fixed costs and decreasing variable costs
D)low fixed costs and weakly increasing variable costs

Quizplus · Accepted Answer

Economies of scale occur when a company's production costs per unit decrease as it produces more units, often due to large fixed costs and/or weakly increasing variable costs. This means the cost of producing each additional unit falls as production scales up, typically because the fixed costs (like machinery or buildings) are spread over more units and the variable costs increase at a slower rate.

Economies of Scale Result from