Taylor Helmets has been able to lower the average cost of producing a bicycle helmet as it increases the number of helmets it manufactures each day. Taylor Helmets is most likely benefitting from ________.

Question

Quizplus · Accepted Answer

Economies of scale refer to the cost advantages that a company can achieve as it increases its production output. As Taylor Helmets increases the number of helmets it manufactures each day, it is able to spread its fixed costs (such as rent, equipment, and salaries) over a larger number of units, thereby reducing the average cost per unit produced. Therefore, Taylor Helmets is most likely benefiting from economies of scale.

Taylor Helmets Has Been Able to Lower the Average Cost