THE VIRGINIA DYNASTY 1801 1825
AMERICAN INDUSTRIALIZATION FACTORY SYSTEM AND MARKET REVOLUTION
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
high fixed costs
|
|
|
high operating costs
|
|
|
economies of scale
|
|
|
stockholders
|
Detailed explanation-1: -Companies can achieve economies of scale by increasing production and lowering costs. This happens because costs are spread over a larger number of goods. Costs can be both fixed and variable.
Detailed explanation-2: -Purchasing economies of scale They are economies of scale achieved via buying in bulk. That is, larger businesses more readily have the cash and output to warrant buying materials in much larger quantities, which can bring them per-unit cost advantages smaller businesses are otherwise unable to achieve.
Detailed explanation-3: -Economies of scale refer to the cost advantage experienced by a firm when it increases its level of output. The advantage arises due to the inverse relationship between the per-unit fixed cost and the quantity produced. The greater the quantity of output produced, the lower the per-unit fixed cost.