question archive Which of the followings is true? Economies of scale means: A) As the production quantity increases, the total cost decreases B) As the production quantity increases, the cost per unit decreases C) As the production quantity increases, both the cost per unit and the total cost decreases d) All of the above
Which of the followings is true? Economies of scale means: A) As the production quantity increases, the total cost decreases B) As the production quantity increases, the cost per unit decreases C) As the production quantity increases, both the cost per unit and the total cost decreases d) All of the above
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Which of the followings is true?
Economies of scale means:
A) As the production quantity increases, the total cost decreases
B) As the production quantity increases, the cost per unit decreases
C) As the production quantity increases, both the cost per unit and the total cost decreases
d) All of the above
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This is a guideline of how to understand this question.
The correct answer is; All of the above.
Step-by-step explanation
Economies of scale are cost benefits obtained by businesses when production becomes efficient. Businesses can attain economies of scale by increasing production and lowering expenses/costs. A smaller business charges more extra for a similar commodity marketed by a larger business because the cost per unit depends on how much the business generates/produce. Bigger businesses can generate more by spreading the cost of production over a larger quantity of products.
