Which of the Following Is True of Economies of Scale

question 129

Multiple Choice

Which of the following is true of economies of scale?

• A)It increases average unit cost by channeling fixed costs toward defined volumes.
• B)A firm may not be able to attain an efficient scale of production unless it serves global markets.
• C)The ability to spread variable costs over a large volume is a source of economies of scale.
• D)Global sales decreases a firm's bargaining power with suppliers as they are more dependent on their services.

---

Definitions:

Expense Account

An account in which businesses record and track expenditures related to specific activities, such as travel or entertainment, for accounting purposes.

Credit Postings

Entries made on the credit side of an account, indicating an increase in liabilities, revenue, or equity and a decrease in assets.

Debit Postings

Entries made on the left side of a ledger account, indicating an increase in assets or expenses or a decrease in liabilities, equity, or revenue.

Account Balance

An account balance refers to the amount of money held in a financial repository, typically a bank account, at any given moment.