Question

Economies of scale:

Multiple Choice:
O can be avoided by purchasing supplies and raw materials in large quantities.
O are achieved when a firm reduces its average cost of production as it produces more.
O help explain the success of small businesses.
O are available to small firms but not to large firms due to management inefficiencies.

Answer 1

are achieved when a firm reduces its average cost of production as it produces more.

Step-by-step explanation:

Economies of scale is reduction in the average cost as production increases due to the large size of the firm which makes it more efficient.

It is large firms that enjoy economies of scale.

Economies of scale can be achieved by buying supplies in large quantities. When firms buy in large quantities, they enjoy discounts which reduces their average cost. This is a form of internal economies of scale.

I hope my answer helps you.