Economies of scale means

Correct option is B

Economies of scale refer to the situation where cost per unit of output decreases as the scale of production increases. This reduction occurs because fixed costs are spread over a larger number of output units, lowering average cost. The concept focuses specifically on unit cost, and not on total cost of production or distribution. Hence, economies of scale mean reduction in unit cost of production.
Information booster: Economies of scale arise due to better utilization of machinery, specialization of labor, and efficient management. Large-scale production allows access to bulk purchasing and advanced technology, reducing per unit cost. There are both internal and external economies of scale, depending on the source of cost reduction. Diseconomies of scale may occur if management inefficiency and coordination problems increase with size.
Why other options are incorrect: (a) Reduction in unit cost of distribution is not the primary definition of economies of scale. (c) Total cost may increase with production even when unit cost is decreasing, so this option is incorrect. (d) Total cost of distribution does not necessarily decrease with increased scale of production.