In 1955,the chairman of the Sony corporation offered to sell transistor radios through department stores in the United States.Sony based its selling price on its average total cost of production.If a store bought 5,000 radios,Sony would sell them at $29.95 each.For 10,000 there would be a discount,and for more than 10,000 the price would begin to climb.Based on this information,Sony experienced economies of scale

Question

Quizplus · Accepted Answer

Economies of scale occur when the average total cost of production decreases as the quantity produced increases. In this case, the average total cost of production decreases from $29.95 to a lower price for quantities between 5,000 and 10,000 radios.

In 1955,the Chairman of the Sony Corporation Offered to Sell