What term describes the cost advantages that a business obtains due to expansion?

The term that describes the cost advantages a business obtains due to expansion is "Economies of Scale." This concept refers to the phenomenon where the average cost per unit of production decreases as the scale of output increases. When a business expands its production, it can spread fixed costs, such as overhead or administrative expenses, over a larger number of goods. This typically leads to a reduction in the per-unit cost.

Additionally, larger businesses can often negotiate better prices for raw materials due to bulk purchasing, utilize more efficient production techniques, and enhance operational efficiencies, all contributing to lower costs. These advantages allow the business to improve its competitiveness in the market, potentially leading to increased market share and profitability.

In contrast, the other terms do not accurately reflect the concept of cost advantages from expansion. Cost/Benefit Analysis is a tool used to evaluate the financial implications of decisions, International Trade pertains to the exchange of goods and services between countries, and Tariffs are taxes imposed on imported goods that influence trade dynamics and pricing but are not directly related to the cost advantages of business expansion.