When a company expands its sales volume through international expansion it can realize cost savings from economies of scale through all of the following except
A) spreading fixed costs over its global sales volume.
B) utilizing its production facilities more intensely.
C) increased bargaining power with its suppliers.
D) improved customer responsiveness.
E) all of these are ways that a company can realize cost savings from economies of scale.

Question

Quizplus · Accepted Answer

Improved customer responsiveness is not a way that a company can realize cost savings from economies of scale. While expanding globally can lead to cost savings through spreading fixed costs, utilizing production facilities more intensely, and increased bargaining power with suppliers, these do not necessarily improve customer responsiveness.

When a Company Expands Its Sales Volume Through International Expansion