Question

Software development is an expensive process, but manufacturers are able to spread out the costs of the development over the hundreds of thousands of software packages sold to consumers. What is helping to drive down costs per unit in this situation

Answer 1

Answer:

Economies of Scale

Explanation:

Software development is an expensive process, but manufacturers are able to spread out the costs of the development over the hundreds of thousands of software packages sold to consumers. Economies of scale  help them to drive down costs per unit. For example JAVA attains the economies of scale by allocating its fixed costs of making latest versions to all of the existing customers who are already using their software. Likewise, car manufacturing companies achieve economies of scale by making large number of cars. When we produce large number of units then the per unit costs decrease when we go for increasing the number of units. It is one of the important technique which has been used by many well known and popular organisation throughout the world.