Companies can achieve economies of scale by expanding into international markets because of production costs increase....

Companies can achieve economies of scale by expanding into international markets because of production costs increase. true or false

Expert Solution

Companies can achieve economies of scale by expanding into international markets because of production costs increase.

The above given statement is: FALSE

Explanation: Let us first discuss of the term "economies of scale" and what does that term indicates. The economies of scale is the concept that explains about the cost advantage in the production. When the over all sale increases then the result will be that the cost of production per unit will decrease. Here in the above given statement the companies can't achieve the economies of scale by expanding into international market because of the production cost increase. The companies can attain the economies of scale by means of reduction in the production cost. To achieve the economies of scale the companies must increase the production and reduce the costs. But the given statement contradicts the reality and hence the given statement is false.

Rahul Sunny answered 2 years ago

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