Which Economic Concept Explains Why a Large Drugstore Chain Can

question 80

Multiple Choice

Which economic concept explains why a large drugstore chain can produce at a lower average cost than Whoville Pharmacy, an individually owned drugstore?

• A)increasing marginal returns
• B)diminishing marginal returns
• C)economies of scale
• D)diseconomies of scale
• E)constant returns to scale

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Definitions:

Models

Simplified representations of complex realities to predict or analyze behaviors and events.

Action

In the context of decision-making or behavior, the process or act of doing something towards achieving a specific result or outcome.

Random Sample

A subset of a statistical population in which each member has an equal chance of being chosen.

Defective Items

Products that fail to meet quality standards or specifications.