Andy Dungy owns a company that makes Apple iPod, iPhone, and iPad accessories. He is trying to increase his sales, primarily because he knows that increasing production lowers the average cost of each unit produced. The reason for growth illustrated in this example is:
A) economies of scope
B) market leadership
C) influence, power, and survivability
D) need to accommodate the growth of key customers
E) economies of scale

Question

Quizplus · Accepted Answer

The reason for growth in this example is economies of scale, as the owner wants to increase production to lower the average cost of each unit produced. This is a classic example of economies of scale, where the unit cost of production decreases as the volume of production increases.

Andy Dungy Owns a Company That Makes Apple IPod, IPhone