Why Is It Dangerous to Justify Capacity Expansion Using Economies

Multiple Choice

Why is it dangerous to justify capacity expansion using economies of scale?

A) It is far too specific to use as a basis for capacity decisions.
B) Volume, capacity, and process considerations are looked at individually.
C) The common notion that unit costs decline for larger facilities due to size is not always accurate.
D) It requires consideration of quality, dependability, and flexibility.