The Main Source of Economies of Scale Is

question 8

Multiple Choice

The main source of economies of scale is

• A) reductions in the price of factors of production.
• B) greater specialization of both labor and capital.
• C) increasing average costs.
• D) decreasing marginal product.
• E) the ability to hire less labor.

---

Definitions:

Cost Formula

An equation used to calculate the total cost of production, including fixed and variable components.

Machine Hours

A measure of production time, referring to the total hours that machinery is operational within a specific period.

Maintenance Cost

Maintenance cost is the total expense incurred in keeping an asset in good working condition, including costs for repairs, replacements, and preventive measures.

Administrative Expense

Overhead or general expenses related to the administration of a business, not directly tied to any specific department or product.