A toy maker sells a large number of toys and due to the large volume production it is able to acquire the raw materials required to make the toys at a cheaper price than the competition. In this case, the toy maker is taking advantage of ________.
A) economies of scale
B) economies of scope
C) organizational culture
D) organizational structure

Question

Quizplus · Accepted Answer

The scenario describes the toy maker taking advantage of the benefits of producing a large number of toys, which is known as economies of scale. By having a larger volume of production, the toy maker can purchase raw materials at a cheaper price and reduce the average cost of production.

A Toy Maker Sells a Large Number of Toys and Due