Economies of scale are said to exist when inputs are increased by some percentage and output increases by a(n) percentage, causing unit costs to .

A. greater; fall
B. smaller; fall
C. greater; rise
D. smaller; rise
E. equal; fall

A greater and fall

Explanation:

Economies of scale are said to exist when inputs are increased by some percentage and output increases by a(n) greater percentage, causing unit costs to fall. This is referred to as the cost advantages obtained by companies when production becomes well organized. One reason for economies of scale is specialization of labor and of machinery. This brings a great input to production because Labour must have mastered his/her field coupled with the help of machinery which will eventually result into a great turn out.

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