A manufacturing company that benefits from lower costs per unit as it grows is an example of a firm exhibiting:

A) increasing returns to scale.
B) decreasing returns to scale.
C) increasing opportunity costs.
D) scale reduction.

Increasing Returns to Scale

A situation in production where doubling the inputs results in more than doubling the output, leading to efficiencies and economies of scale.

Decreasing Returns to Scale

A situation in which a firm experiences a less than proportional increase in output despite a proportional increase in all inputs, typically due to inefficiencies.

Increasing Opportunity Costs

The concept that as you produce more of one good, the opportunity cost of producing that next unit increases.