question 6 (2 points) 1. for large businesses, one way to keep costs low and increase profits is known as…

question 6 (2 points) 1. for large businesses, one way to keep costs low and increase profits is known as what? (blank 1) 2. explain what that means. (blank 2) view hint for question 6

question 6 (2 points) 1. for large businesses, one way to keep costs low and increase profits is known as what? (blank 1) 2. explain what that means. (blank 2) view hint for question 6

Answer

Brief Explanations:

  1. One common way for large - businesses to cut costs and boost profits is through economies of scale. It refers to the cost advantages that enterprises obtain due to their scale of operation.
  2. When a business grows larger, it can spread fixed costs (such as rent for a large factory, cost of machinery) over a larger number of units produced. Also, it may be able to negotiate better deals with suppliers due to higher purchasing volumes, reducing variable costs per unit. This leads to lower average costs and higher profits.

Answer:

  1. Economies of scale
  2. Cost advantages from large - scale operation, like spreading fixed costs and getting better supplier deals to lower average costs.