You overheard Mr. John, the newly hired marketing manager, saying: “I think our company shouldtake advantage of economies of scale by increasing output, thereby spreading out our overheadfixed...

You overheard Mr. John, the newly hired marketing manager, saying: “I think our company should

take advantage of economies of scale by increasing output, thereby spreading out our overhead

fixed costs”.

Answer the following questions

a. Examine the validity of the statement above and provide, if any, a better description for

“economies of scale”.

b. Explain how economies of scale may be achieved by organizations. Highlight what would prevent

them to occur.

Oct 07, 2022

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