In entrepreneurship, what does "scalability" refer to?

Scalability in entrepreneurship refers to the capacity of a business to grow and expand its operations, production, or service delivery in response to an increase in demand, without a proportional increase in costs. When a business is scalable, it can leverage its resources more effectively to accommodate growth. For example, a scalable business model allows a company to increase its output by using existing resources or processes, often enhancing its profitability as it scales.

The option that highlights the ability to increase production based on demand captures this concept, as it addresses the fundamental aspect of scalability—responding to a higher market demand efficiently and effectively. This is crucial for businesses looking to grow rapidly while maintaining financial health.