Question

__________________ are the reductions in unit cost achieved by producing a large volume of a product.

a-Economies of scale
b-Learning effect
c-Experience curve
d-Locations economy

Answer 1

Economies of scale are the reductions in unit cost achieved by producing a large volume of a product. As the quantity of output goes up, the cost per unit goes down. This is because a larger factory can produce at a lower average cost than a smaller factory.

Step-by-step explanation:

Economies of scale are the reductions in unit cost achieved by producing a large volume of a product. As the quantity of output goes up, the cost per unit goes down. This is because a larger factory can produce at a lower average cost than a smaller factory. For example, warehouse stores like Costco or Walmart take advantage of economies of scale to offer lower prices to consumers.