_____ are reductions in variable costs directly related to increasing volume of production output.

Question

Quizplus · Accepted Answer

Economies of scale refer to the cost advantages that a business can achieve by increasing its production volume. These cost advantages are often realized in the form of a reduction in variable costs, such as the cost of raw materials, labor, and energy, which are directly related to increasing the volume of production output. This means that as a company manufactures more units of a product, it can achieve lower costs per unit by spreading fixed costs across a larger quantity of products.

_____ Are Reductions in Variable Costs Directly Related to Increasing