Unit prices go down when ostructing multiple units versus a single unit. this is known as:

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Jarrett

Business

6 February, 04:30

Unit prices go down when ostructing multiple units versus a single unit. this is known as:

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Katie Wolf · Answer 1

Economies of Scale.

Whether you make 1 sandwich or 100, you will still need counter tops, refrigerators for ingredients, tools, and containers. These are your fixed costs that you have to pay even if you only make 1 sandwich. If you make 100 sandwiches your ingredients cost will go up but the price for all the equipment, etc will stay the same so the average cost of production goes down. This is known as economies of scale.