Question

Ray started out with one small print shop. His business has grown so much that he now has two other branches across town. Ray has found that having three locations has greatly increased his production levels. He also notices that the price he pays for supplies (paper, ink, and packaging materials) has gone down considerably since he can now buy these items in bulk quantities. This exemplifies the principle known as:

Answer 1

The correct answer here is Economies of Scale.

Explanation: Economies of scale is the proportionate savings with the proportionate increase in the production. They can also be understood as cost advantages. Companies achieve scale by maximizing the production and apparently less cost due to bulk purchases which reduces the cost. It gives the competitive edge over the competitors.It is judged by business size,if a business is expanding or size is increasing that means business have economies of scale. . Hence, in this case Ray is experiencing Economies of Scale.