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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Learning curve
Please explain what is economies of scale? Is it a cost reduction strategy but how it works?
There is an MCQ which states that learning rate leads to economies of scale. Is that true?
Thanks
It is meaning that the more that are produced then the lower the cost per unit.
For example, producing more means buying more material and buying larger quantities might mean that we pay less per kg..
Learning means that the time taken per unit is less as we produce more units, therefore there is less labour cost per unit.