The rationale behind ________ is that larger sales mean fixed costs of operations can be spread over more units,which lowers average unit costs.

Question

Quizplus · Accepted Answer

The concept described in the statement is economies of scale, which refers to the cost advantages that a business can achieve by producing on a larger scale. As volume increases, fixed costs such as rent, salaries, and equipment can be distributed across a greater number of units, reducing the average cost per unit.

The Rationale Behind ________ Is That Larger Sales Mean Fixed