Final answer:
The question relates to production and cost management in Business, focusing on how economies of scale influence the cost per unit and the efficiency of operations in manufacturing settings. Different levels of production volume can lead to varying average costs per unit, exemplifying the concept of economies of scale.
Step-by-step explanation:
The question relates to unit, batch, and product activities which are terms associated with production and cost management in Business. These activities are crucial for understanding how economies of scale affect the cost of production per unit. Economies of scale refer to the cost advantages that a business can achieve by increasing the scale of production, leading to a reduced cost per unit of output.
For instance, in a scenario where a plant is producing toaster ovens, a plant producing a small volume (plant S) might have higher costs per unit than a plant that produces a larger volume (plant L). As the quantity of production increases, the average cost of production decreases, which is illustrated by Figure 19.5 and Figure 33.5 with different production plants. This is a fundamental concept in Business studies, highlighting the impact of production volume on costs.
Moreover, the segmentation of activities into unit, batch, and product helps to design a mechanized work environment where each activity is planned according to the scale of operations to maximize productivity and efficiency.