The term "economies of scale" means that:

Question

Quizplus · Accepted Answer

Economies of scale refer to the phenomenon where the cost of producing a product decreases as the company produces larger quantities of it. This is because fixed costs (like rent, equipment, and salaries) can be spread out over a larger number of units, making each unit cheaper to produce. However, economies of scale do not necessarily mean that the largest producers are always the most efficient or that producing more always leads to greater profits.

The Term "Economies of Scale" Means That