With accumulated production experience and a higher volume of production, companies not only become more efficient but also ________.
A) gain economies of scale
B) incur higher overhead costs
C) create derived demand in the market
D) spend more per unit of produced output
E) tend to routinely spend less on inputs

Question

Quizplus · Accepted Answer

With accumulated production experience and a higher volume of production, companies are able to spread their fixed costs over a greater number of units, resulting in a lower cost per unit. This is known as economies of scale.

With Accumulated Production Experience and a Higher Volume of Production