As XYZ Company produces larger quantities of watches, the cost of producing each watch goes down. This is known as
A. micro-marketing
B. possession utility
C. economies of scale
D. marketing concept
E. transaction efficiency
Answer: (C) The question relates to a definition. Economies of scale means that as a company produces larger quantities of an item, the cost of producing each item goes down. (C) is the correct answer. Micro-marketing looks at marketing as a set of activities; (A) is incorrect. Possession utility is having the right to use a product; (B) is not correct. The marketing concept looks at satisfying customers needs. (D) is not correct. Transaction efficiency is not an "official" marketing term although it may be used to describe a process, thus, (E) is not correct.