Answer:
The correct answer is economic of scale.
Step-by-step explanation:
Economies of scale refers to the situation where, as the quantity of output goes up, the cost per unit goes down.
This is due to fact that fixed cost allocated to unit decrease with increase in production. In other words fixed cost is fixed in total but variable per unit and variable cost is fixed per unit but variable in total.
For example a company produce product A having variable cost of 10 dollars per unit and fixed cost of the company is 100 dollars. So if company produce one quatity of A than its total cost will be 110 dollars and per unit cost will be the same but if company produce two units of A its total cost will be 120 dollars but per unit cost will be decrease to 60 dollars. (120/2)