WAEC - Economics (2018 - No. 17)
The larger a firm, the lower its cost of production
This statement explains the?
law of diminishing marginal returns
concept of economies of scale
law of comparative cost advantage
theory of division of labour
Erläuterung
Economies of Scale refer to the cost advantage enjoyed by a firm when it increases its level of output. An increase in the level of output indicates the growth and expansion of a firm. This happens when costs are spread over a larger number of goods.