Question

5. Which of the following is an example of global economies of scale? a. Johnson & Johnson makes fourteen different varieties of Band-Aid for various product segments in different countries. b. Intel has a big plant in Kiryat Gat (Israel) making i7 chips, which supplies the whole world, reducing the per-unit cost of each chip. c. Mutual funds invest their stocks in several different country funds, to offset the risk of one currency failing suddenly. d. Wal-Mart sells certain products very economically in some countries (like mobile AC units in Mexico), in order to attract customers, while other products may be at par with, or even more expensive than US prices..

Answer 1

Answer:

b. Intel has a big plant in Kiryat Gat (Israel) making i7 chips, which supplies the whole world, reducing the per-unit cost of each chip

Explanation:

Economies of scale is cost reduction as a result of the large scale do production. As production increases, cost falls.

Because of the large scale of production of itel, cost of shopping is falling. This is an example of economies of scale.

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