Myshirts.com, a company that manufactures shirts, buys large batches of dressing material from a supplier. The supplier charges them less than what Myshirts.com would have had to pay if it had purchased the material from different sources. As a consequence, the cost of manufacturing each shirt at Myshirts.com is lower than at other manufacturers. This is an example of economies of:
A) scale.
B) demand.
C) scope.
D) brand.
E) integration.

Question

Quizplus · Accepted Answer

Economies of scale occur when a company reduces its costs per unit due to increased production, often achieved by purchasing materials in bulk at a lower price.

Myshirtscom, a Company That Manufactures Shirts, Buys Large Batches of Dressing