A university that benefits from lower costs per unit as it grows is an example of:
A) economies of scale.
B) diseconomies of scale.
C) increasing opportunity costs.
D) scale reduction.

Question

Quizplus · Accepted Answer

Economies of scale refers to the cost advantages that a business or organization can achieve when it increases its output or size. As the university grows, it can spread its fixed costs over a larger number of students, resulting in lower costs per unit (per student). Therefore, the correct answer is A) economies of scale.

A University That Benefits from Lower Costs Per Unit as It