Global economies of scale can be realized by:
A)restricting the expansion of overseas sales.
B)limiting the utilization of production facilities.
C)curbing bargaining power with suppliers.
D)decreasing cost savings through learning effects.
E)spreading the fixed costs associated with developing.

Question

Global economies of scale can be realized by:
A)restricting the expansion of overseas sales.
B)limiting the utilization of production facilities.
C)curbing bargaining power with suppliers.
D)decreasing cost savings through learning effects. 
E)spreading the fixed costs associated with developing.

Quizplus · Accepted Answer

Global economies of scale are achieved when fixed costs are spread over a larger production volume, leading to lower average costs per unit. By spreading the fixed costs associated with developing a product or service over a larger customer base, fixed costs per unit decrease, contributing to cost reductions. Restricting overseas sales, limiting production utilization, and curtailing bargaining power with suppliers all work against economies of scale, while decreasing cost savings through learning effects implies increased costs per unit.

Global Economies of Scale Can Be Realized By