Economies of scale arise when the unit cost of producing falls as the number of units produced rises.

Question

Quizplus · Accepted Answer

This statement accurately defines economies of scale. As production volume increases, fixed costs such as machinery and equipment can be spread across a larger number of units, resulting in a lower cost per unit. Additionally, efficiency gains may be achieved through processes such as specialization and automation, further reducing the unit cost.

Economies of Scale Arise When the Unit Cost of Producing