The United States and the European Union are groups of semi-independent states that have come together under an agreement whereby resources can travel freely across borders and a common currency is in use. Which of the following statements best explains how this allows for the achievement of economies of scale?
The removal of trade borders and a common currency enhance trade between member states.
Each state or country can now target larger markets and can thus earn more export revenue.
States and countries no longer have to worry about borders impeding trade.
Each state or country can adopt large-scale production techniques that allow lower per unit costs of production.
The statement that best explains how the United States and the European Union's agreements allow for the achievement of economies of scale is:
Each state or country can adopt large-scale production techniques that allow lower per unit costs of production.
This statement highlights that by operating within a larger market facilitated by the removal of trade barriers and a common currency, states and countries can produce goods on a larger scale. This increased production can lead to lower per unit costs, which is a key aspect of achieving economies of scale.