Economies of scale give an advantage to what type of company? (Select the best answer.)

Question 25 options:

A company with a small number of employees

A company that makes many sales

A company with many variable costs

A service-based company

A company that makes many sales

Explanation:

Economies of Scale refer to the cost advantage, a firm experience when it increases its level of output. This advantage arises due to the inverse relationship between per-unit fixed cost and the quantity produced. The greater the quantity of output produced, the lower the per-unit fixed cost.