The per unit decrease in cost that occurs when volume increases is known as
A)economies of scale
B)economies of scope
C)diseconomies of scale
D)the best operating level

Question

Quizplus · Accepted Answer

Economies of scale refer to the cost advantage that an organization experiences when it increases its level of output. As the volume of production increases, the average cost of production per unit decreases, leading to cost savings. Therefore, A is the correct answer. B refers to the cost advantage achieved by producing a range of products rather than specializing in a single product, and C refers to the situation where costs increase with output due to inefficiencies in production. D is a term used to refer to the level of output at which an organization achieves the lowest unit cost but is not the answer to the given question.

The Per Unit Decrease in Cost That Occurs When Volume