How does economy of scale result in an increase in effective capacity?
A)Because more time will be spent processing instead of setting up
B)Because setup time will be increased
C)Because quantity discounts will be less
D)Because average inventory levels are decreased
E)Because fewer managers are needed

Question

Quizplus · Accepted Answer

Economy of scale allows for more efficient use of resources, such as workers and equipment, which leads to a reduction in setup time per unit. This means that more time can be spent processing products, resulting in an increase in effective capacity.

How Does Economy of Scale Result in an Increase in Effective