Global economies of scale can be realized by
A) expansion of overseas sales.
B) better utilization of production facilities.
C) boosting bargaining power with suppliers.
D) increasing cost savings through learning effects.
E) all of these choices.

Question

Quizplus · Accepted Answer

Global economies of scale refer to the cost advantages achieved when a company operates on a global scale, rather than just domestically. Option A (expansion of overseas sales) can contribute to economies of scale as it increases the volume of products being produced and sold globally, allowing for greater efficiencies and cost savings. Option B (better utilization of production facilities) allows for lower costs per unit as fixed costs (such as the cost of building and maintaining production facilities) can be spread over a larger volume of products. Option C (boosting bargaining power with suppliers) allows for better terms on the purchase of raw materials or finished goods, resulting in lower costs to the company. Option D (increasing cost savings through learning effects) involves gaining efficiency and improving performance through experience and repetition, which results in lower costs per unit as production becomes more streamlined. Therefore, all of these options contribute to global economies of scale.

Global Economies of Scale Can Be Realized by