Why Is It Dangerous to Justify Capacity Expansion Using Economies

question 28

Multiple Choice

Why is it dangerous to justify capacity expansion using economies of scale?

• A) It is far too specific to use as a basis for capacity decisions.
• B) Volume, capacity, and process considerations are looked at individually.
• C) The common notion that unit costs decline for larger facilities due to size is not always accurate.
• D) It requires consideration of quality, dependability, and flexibility.