Question

Argues that increasing returns to scale, especially economies of scale, are important for superior performance in industries that succeed best as their production volume increases?

Answer 1

Answer:

True

Explanation:

Increasing returns to scale are important for superior performance in industries that succeed best as their production volume increases because it reduces the average cost per unit.

Generally economies of scale for instance can occur through bulk purchase of material which would attract quantity discounts and hence material cost per unit will fall.

In the case of industrial competition, such a company which has bought in bulk and reduced material cost per unit will be able to sell at reduced price and make more sales and profit