Economies of scale can be caused by _____
A)a decrease in plant size.
B)short-run increases in marginal productivity.
C)the use of larger, more specialized machines.
D)higher information costs as a firm expands.
E)bureaucratic red tape as a firm expands.

Question

Quizplus · Accepted Answer

The use of larger, more specialized machines can result in economies of scale because they can facilitate increased production at a lower cost per unit. As the size of the production process or plant increases, more specialized equipment can often be utilized, with higher output rates and lower costs per unit than smaller, more generalized equipment. This increased efficiency results in lower production costs per unit, leading to economies of scale. The other options listed do not typically lead to economies of scale.

Economies of Scale Can Be Caused by _____