Economies of scale may arise from
A) cost reductions gained through mass production.
B) discounts on bulk purchases of raw material inputs and component parts.
C) advantages gained by spreading production costs over a large production volume.
D) cost savings associated with spreading marketing and advertising costs over a large volume of output.
E) all of these.

Question

Quizplus · Accepted Answer

All of these factors contribute to economies of scale. Mass production allows for cost reductions, bulk purchasing of inputs and components can lead to discounts, spreading production costs over a larger volume can be more efficient, and marketing and advertising costs can be spread over a larger volume to reduce per-unit costs.

Economies of Scale May Arise from