Question

Economies of scale mean __________.

• A. reduction in unit cost of production
• B. reduction in unit cost of distribution
• C. addition to the unit cost of production
• D. reduction in the total cost of production

Answer 1

The correct option is A reduction in unit cost of production

In economics, scale refers to the production. Economies of scale mean the decrease in per unit cost of production. Cost of production or factor cost should be reduced.
For example, Wal-Mart's "everyday low prices" are due to its huge buying power.