When Economies of Scale Exist

question 97

Multiple Choice

When economies of scale exist,

• A)production costs per unit increase as output expands.
• B)production costs per unit decline as output expands.
• C)total production costs decrease.
• D)total production costs increase.

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Definitions:

Marketing Costs

Expenditures associated with promoting, selling, and distributing a product or service, including advertising, market research, and sales force expenses.

Geographical Region

An area defined by natural or artificial features, political boundaries, or cultural characteristics that distinguish it from surrounding areas.

Limited-Function Merchant Wholesaler

A wholesaler that provides a limited range of services, focusing on specific functions like storage or delivery rather than comprehensive support.

Full-Function Merchant Wholesaler

A wholesaler that provides a range of services including stocking inventory, operating warehouses, and offering credit to retailers.