Astate-wide alliance of independent hospitals has formed in order to do group purchasing of medical supplies. group purchasing allows the hospital alliance to negotiate lower prices with suppliers because of the large quantity of materials ordered. this is an example of the advantage of resulting from an alliance.

Its an example of - Economies of scale

Explanation:

Group purchasing allows the hospital alliance to negotiate lower prices with suppliers because of the large quantity of materials ordered.

This is an example of the advantage of economy of scale resulting from an alliance.

Economies of scale shows the cost advantage achieved by a business when its level of output is increased.

This advantage arises when per unit fixed cost is less and the quantity produced is more.