When a Firm Produces a Large Quantity of a Product

question 266

Multiple Choice

When a firm produces a large quantity of a product, the cost of producing each individual unit usually goes down. This is known as:

• A) discrepancies of quantity.
• B) exchange efficiency.
• C) economies of scale.
• D) macro-marketing.
• E) discrepancies of assortment.

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Definitions:

Average Total Cost

The total cost of production divided by the quantity of output produced, representing the per unit cost of production.

Natural Monopolist

A single supplier in a market where the costs of production are lowest when just one firm provides the product or service.

Reduce Costs

Measures and practices aimed at decreasing expenses and improving efficiency in processes or operations.

Price Discrimination

A pricing strategy where a seller charges different prices for the same product or service to different customers, not based on the costs of production but on what the seller believes each customer can afford or is willing to pay.