Question

what is meant by economies of scale?

A) is it cheaper per unit to produce a large number of a product than it is to produce a small number

B) it is the process of making products heavier

C) it is synonym for "big business"

D) it is any market that sets prices based upon the weight of the goods

Answer 1

The correct answer is A.

Economy is scale refers to savings in production costs that can only really be found by creating more of an item.

An area that I work with is the dairy sector. For the dairy sector, farmers will benefit from economies of scale if they produce more, allowing them to spread the cost of milking parlors over more producing cows.