The ability to spread fixed costs over a large volume results in a cost-savings phenomenon referred to as:
A) volume synergies
B) economies of scale
C) captured savings
D) size effects
E) volume discounts

Question

Quizplus · Accepted Answer

Economies of scale refer to cost savings that occur when a company increases production and can spread fixed costs over a larger volume of goods. This results in a lower cost per unit and can translate into higher profitability.

The Ability to Spread Fixed Costs Over a Large Volume