The technique by which companies reduce cost of transaction services and results in increased efficiency is classified as ____________?
Correct answer: B. economies of scale
- A. economies of cost
- B. economies of scale
- C. economies of efficiency
- D. economies of transaction
Explanation
Economies of scale reduce the average cost of transaction services as the volume of operations increases, often through technology and efficient systems. The other choices are not the established term for this cost advantage.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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