Economics-Performance-09-ID

By WScott | November 15, 2024

A small bakery increases its production from 100 to 150 cupcakes per day. As a result, its cost per cupcake decreases because the bakery is spreading its fixed costs (like rent) over a larger number of units. This phenomenon is called ____________.

  • Inventory Management
  • Profit Maximization
  • Diminishing Marginal Returns
  • Economies of Scale