Which of the following is an example of economies of scale?(1 point)

Question

Responses

A business increases its production of widgets, and the cost of producing each widget decreases.
A business increases its production of widgets, and the cost of producing each widget decreases.

A business decreases its production of widgets, and the total cost of production decreases.
A business decreases its production of widgets, and the total cost of production decreases.

A business increases its production of widgets, and the total cost of production decreases.
A business increases its production of widgets, and the total cost of production decreases.

A business decreases its production of widgets, and the cost of producing each widget decreases.

Answer 1

The correct example of economies of scale is:

A business increases its production of widgets, and the cost of producing each widget decreases.

Economies of scale refer to the cost advantage that arises with increased output of a product. As the scale of production increases, the cost per unit of production typically decreases, leading to greater efficiency.