Concept:Large scale production lowers the average cost per unit through economies of scale.
Explanation:When production is expanded, total cost increases, but not in the same proportion as output.
For example, a firm may use 50 litres of fuel to produce 1000 units.
The same 50 litres may be enough to produce 1500 units.
This means the cost spent on fuel per unit falls from
100050 to
150050.
Therefore, large scale production reduces the unit cost of production.
Answer:A. unit cost of production falls