Concept:Economies of scale mean that as a firm grows larger, its average cost of production falls.
Explanation:When a firm expands its scale of output, it can spread fixed costs over more units of output.
This lowers the cost per unit of production.
Larger firms also gain advantages like bulk buying, better technology, and managerial efficiency.
Therefore, the statement “The larger a firm, the lower its cost of production” directly explains the concept of economies of scale.
Answer:B. concept of economies of scale