Question

Businesses benefit from economies of scale when the cost of an investment can be?

Answer 1

Businesses benefit from economies of scale when the cost of an investment can be Economies of scale.

What is Economies of scale?

The cost advantages that businesses experience as a result of their size of operation are known as economies of scale, and they are often quantified by the amount of output generated in a given amount of time. Scale can be increased when the cost per unit of output decreases. The phenomenon known as economies of scale occurs when the scale or magnitude of the production produced by a firm increases while the average cost per unit of output decreases.

Because they can give businesses a competitive edge in their industry, economies of scale are crucial. Therefore, businesses will always aim to achieve economies of scale, just as investors would look for them when choosing investments. The costs are distributed across a wide range of products, an organisation that enjoys economies of scope has lower average costs. Because costs drop as production volume rises, a business that enjoys economies of scale has a lower average cost.

Hence, Businesses benefit from economies of scale when the cost of an investment can be Economies of scale.

To learn more about Economies of scale refer to:

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