Asked by IZERE Blaise Innocent on Sep 28, 2024
Which term refers to increases in unit costs as production increases?
A) vicious circle
B) economies of scope
C) diseconomies of scale
D) experience curve effects
Diseconomies Of Scale
Refers to the phenomenon where, beyond a certain point, increasing production results in a rise in the average cost of each unit produced due to factors like management inefficiencies and logistic issues.
Unit Costs
The cost incurred to produce, store, and sell one unit of a product, calculated by dividing the total costs by the number of units produced.
Production Increases
The rise in the amount of goods or services produced by a company, often due to greater demand or improved efficiency.
- Acknowledge the correlation between the economies of scale, share of the market, and profitability levels.
Learning Objectives
- Acknowledge the correlation between the economies of scale, share of the market, and profitability levels.
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