Q201
Technique by which companies reduce cost of transaction services and results in increased efficiency is classified as
A.
economies of cost
B.
economies of scale
AnswerC.
economies of efficiency
D.
economies of transaction
Answer: Option B
Solution
Answer: Option B
Solution:
Technique by which companies reduce cost of transaction services and results in increased efficiency is classified as economies of scale. Economies of scale are cost reductions that occur when companies increase production. The fixed costs, like administration, are spread over more units of production. Sometimes the company can negotiate to lower its variable costs as well.