Ray started out with one small print shop. His business has grown so much that he now has two other branches across town. Ray has found that having three locations has greatly increased his production levels. He also notices that the price he pays for supplies (paper, ink, and packaging materials) has gone down considerably since he can now buy these items in bulk quantities. This exemplifies the principle known as

A. empowerment.

B. unity of command.

C. bureaucracy.

D. economies of scale.

D. economies of scale

Explanation:

A. empowerment. When the employees are given the means, oportunity and responsability they are more productive, this may play a role in this, but it's not what the example is about

B. unity of command. This would require that, in the example, Ray would keep command of the three locations, also, this is not what the example is about

C. bureaucracy. This would mean a set of rules to guide action, again, not what the example is about

D. economies of scale. This is the answer, this means that, when achieved, the greater the quantity, lower the costs

The correct answer is D) economies of scale.

Ray notices that the price he pays for supplies (paper, ink, and packaging materials) has gone down considerably since he can now buy these items in bulk quantities. This exemplifies the principle known as economies of scale.

When your company starts to grow, one of the first things that will be of benefit to you is that the price of the supplies you purchase is going to be cheaper. This is because the more you by, the better the price. That is what economies of scale are known for. These companies are offered better prices due to the number of supplies they buy, allowing the company to offer good prices to customers and getting considerable income.