When Jitters Coffee Company, Inc., can lower the cost of packaging a kilogram of coffee by doubling the quantity packaged each day, it is achieving
A)economies of scope.
B)lower transactions costs
C)economies of scale.
D)efficient team production.
E)all of the above

Question

Quizplus · Accepted Answer

Economies of scale occur when a company is able to lower its per-unit cost as it produces more units. In this case, Jitters Coffee Company is able to lower the cost of packaging per kilogram of coffee by doubling the quantity packaged each day, which is a classic example of economies of scale. The other choices (economies of scope, lower transaction costs, efficient team production) may also be related to the overall efficiency of the company, but they do not specifically apply to this scenario.