If a refinery achieves a reduction in cost by purchasing and transporting crude oil in large quantities, it enjoys

  • A economies of scale
  • B specialization
  • C division of labour
  • D diseconomies of scale
jamb 2013economics

The correct answer is A. economies of scale

Economies of scale refer to the cost advantages that a business can achieve due to an increase in the scale of production.

This can result from factors such as bulk purchasing, efficient transportation, and spreading fixed costs over a larger output.

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