The cost to manufacture one unit of Rinker Audio Products' bestselling hearing aid,the Magnifier,is $87.50.The CFO of the company,Neha Patel,has determined that if the company expands the output of its biggest U.S.plant by 20 percent,the unit cost would be only $82.50.The concept that as plant output expands,unit costs decrease,is known as

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The concept that as plant output expands, unit costs decrease is known as economies of scale. This occurs because fixed costs such as overhead, equipment, and facilities are spread over a larger number of units, resulting in lower unit costs.

The Cost to Manufacture One Unit of Rinker Audio Products