To improve a company's economies of scale, option D, Buying in bulk, is most effective as it reduces the cost per unit with increased output. This strategy is utilized by warehouse stores and can be facilitated by international trade for small economies. Therefore, option (D) is the correct answer.
One way to improve a company's economies of scale is D. Buying in bulk. Economies of scale occur when the cost per unit decreases as the quantity of output increases. When a company buys in bulk, they are purchasing large amounts of materials or products, which often comes with a reduced price per unit due to the larger volume.
This is a common strategy used by companies to lower their overall costs. By reducing the cost of inputs, companies can produce goods at a lower average cost, which is the essence of economies of scale.
Furthermore, international trade can enable small economies to take advantage of economies of scale by accessing larger markets, thus increasing the quantity of output they can sell. This, coupled with the competition and product variety from several producers, can increase efficiency and consumer benefits.
Additionally, a larger factory or operation can often produce goods at a lower average cost than a smaller operation, an idea that is capitalized on by "warehouse stores" like Costco or Walmart.