This or That: Economies of Scale

A company increases production volume, resulting in lower average costs.

• economies of scale

• diseconomies of scale

A large factory becomes less efficient as it grows, leading to increased production costs.

• economies of scale

• diseconomies of scale

A small bakery opens multiple new branches in different neighborhoods, leading to increased purchasing power and reduced ingredient costs.

• economies of scale

• diseconomies of scale

A tech startup hires more software developers to work on the same project, reducing the time needed for completion.

• economies of scale

• diseconomies of scale

A large law firm experiences communication challenges and slower decision-making due to its size.

• economies of scale

• diseconomies of scale

A car manufacturer invests in robotic automation, resulting in a significant reduction in labor costs per vehicle.

• economies of scale

• diseconomies of scale

A retail chain expands its product offerings and increases the number of stores, leading to higher profitability.

• economies of scale

• diseconomies of scale

A crowded restaurant struggles to maintain food quality and customer service as it continues to grow.

• economies of scale

• diseconomies of scale

A software company experiences increased development costs as it diversifies its product line.

• economies of scale

• diseconomies of scale

A large hospital invests in advanced medical equipment, reducing the cost per patient.

• economies of scale

• diseconomies of scale