Which one of the following is NOT a reason why there are economies of scale?
A) Spreading fixed costs, such as depreciation and debt service, over more units
B) Finding process advantage by dedicating resources to individual products
C) Reduced construction costs by building smaller facilities
D) Better bargaining position and quantity discounts on purchased materials

Question

Quizplus · Accepted Answer

Economies of scale refer to the cost advantages gained by producing on a larger scale. Option A, B, and D all provide examples of how producing on a larger scale can lead to cost savings. However, reduced construction costs by building smaller facilities does not lead to cost savings through economies of scale.

Which One of the Following Is NOT a Reason Why