The concept of economies of scale tells us that as plant output expand

QUESTION

The concept of economies of scale tells us that as plant output expands, unit costs decrease

Indicate whether the statement is true or false.

ANSWER

TRUE
In terms of international business, the concept of economies of scale tells us that as plant output expands, unit costs decrease. The reasons include the greater utilization of capital equipment and the productivity gains that come with specialization of employees within the plant.