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If A Refinery Achieves A Reduction In Cost By Purchasing And Transporting Crude Oil In Large Quantities, It Enjoys? - Erudites Academy

If a refinery achieves a reduction in cost by purchasing and transporting crude oil in large quantities, it enjoys?

by | Oct 22 | Economics JAMB | 0 comments

A. economies of scale
B. specialization
C. division of labour
D. diseconomies of scale

Correct Answer:

Option A – economies of scale

Explanation

Economies of scale is a proportionate saving in costs gained by an increased level of production. This means that, a firm begin to enjoy certain benefits such as a reduction in its direct and overhead cost as its scale of transaction and operation expands.

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