Why do producers use the economy of scale theory when they make business decisions

The economy of scale theory in microeconomics, refers to the power of an enterprise to achieve an optimal level of production at the lower cost, in other words, when the production of a company grows the costs of each unit produced is reduced, this guarantees higher revenues for the enterprise. It also responds to the laws of offer and demand, and assures that an enterprise do not exceed the production of the item, when it is not demanded by the consumers.

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i think the answer was to understand the impact on profits? not sure

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answer; lorenz;