Question

Mohit is a successful businessman. He is producing fried chicken by using a secret recipe. Now he has decided to give the franchise of his business to 20 people all across the state. He has to make more raw material to make the packets of the secret recipe for the franchisees. Identify the advantage Mohit will receive by producing more packets of his secret recipe.

• A. Knowledge of the market
• B. Product acceptance
• C. Cost advantage
• D. Management experience

Hint:

Producing more units leads to cost advantages by reducing the per-unit cost, which is essential when scaling a business.

Answer 1

The Correct Option is C

By producing more packets, Mohit will benefit from economies of scale, reducing the per
-unit cost of production. This cost advantage is critical when expanding a business to meet the demand of franchisees.