Photo AI
The main advantage of economies of scale is that a business can achieve A - HSC - SSCE Business Studies - Question 6 - 2020 - Paper 1
Question 6
The main advantage of economies of scale is that a business can achieve A. economic objectives. B. industry benchmarks. C. lower per unit input costs. D. simplified... show full transcript
Worked Solution & Example Answer:The main advantage of economies of scale is that a business can achieve A - HSC - SSCE Business Studies - Question 6 - 2020 - Paper 1
Step 1
C. lower per unit input costs.
Answer
The primary advantage of economies of scale occurs when businesses increase their production levels. As the production increases, the cost per unit typically decreases. This happens because fixed costs are spread over a larger number of goods, reducing the overall cost of production for each individual item. Consequently, businesses can achieve lower per-unit input costs, allowing them to remain competitive in pricing while maintaining profit margins.