Why is it dangerous to justify capacity expansion using economies of scale?
A) It is far too specific to use as a basis for capacity decisions.
B) Volume, capacity, and process considerations are looked at individually.
C) The common notion that unit costs decline for larger facilities due to size is not always accurate.
D) It requires consideration of quality, dependability, and flexibility.

Question

Quizplus · Accepted Answer

Economies of scale are appropriate up to the point that diseconomies of scale begin to appear, so there is a limit.

Why Is It Dangerous to Justify Capacity Expansion Using Economies