"Economies of scale" means that:

Question

Quizplus · Accepted Answer

Economies of scale refer to the cost advantages that companies obtain as they increase production. As a company produces larger numbers of a particular product, the cost of producing each unit goes down, leading to greater efficiency and profitability. Option A correctly explains this concept. Option B is incorrect as the number of producers in an economy has no significant bearing on the need for intermediaries. Option C is incorrect as economic growth is influenced by various factors, and the size of a country is just one of them. Option D is incorrect as the total cost of producing products typically increases as production increases.

"Economies of Scale" Means That