Scenario 1-5
Exodus Moving is a small business that was created to serve local furniture stores' delivery needs in the Boulder Colorado area.They have specialized equipment that allows them to lift and transfer large and bulky pieces of furniture with less risk of damage than most traditional movers.Many of these furniture stores do not sell enough volume to keep their own trucks and drivers busy all of the time, so Exodus fills a real market need.As a result, most such stores are very interested in outsourcing delivery service needs.Exodus has attracted many customers from these stores by guaranteeing 48 hour delivery within a 50 mile radius of any of the stores they serve.Eventually, Exodus hopes to attract the business of other retailers who might require delivery services, such as electronics or appliance stores.
-(Scenario 1-5) Exodus has learned that the more furniture moving volume it has, the lower the cost per item.This has encouraged the president of Exodus to do more advertising so that they can achieve ____ as they get more stores to use their services.

Question

Quizplus · Accepted Answer

Economies of scale refer to the cost advantages that a business can achieve as it increases its production or sales volume. In this scenario, Exodus has learned that the cost per item decreases as they move more furniture, indicating that they are benefiting from economies of scale. Therefore, the president's decision to do more advertising to attract more stores and increase their volume is driven by the desire to achieve economies of scale.

Scenario 1-5 Exodus Moving Is a Small Business That Was Created to Created