When There Are External Economies of Scale, an Increase in the Size

question 24

Multiple Choice

When there are external economies of scale, an increase in the size of the market will

• A) not affect the number of firms, but will lower the price per unit.
• B) decrease the number of firms and lower the price per unit.
• C) decrease the number of firms and raise the price per unit.
• D) increase the number of firms and raise the price per unit.
• E) increase the number of firms and lower the price per unit.

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Definitions:

Global Convergence

The process by which ideas, goods, and services spread and integrate across different cultures and countries, leading to increased similarity.

Infrastructure Development

The construction and improvement of foundational services and facilities such as roads, bridges, water supply, and electricity networks that are necessary for economic development.

Raw Materials

The basic materials from which products are manufactured or made, typically extracted from the natural environment.

Factors Of Production

The component parts, skill sets, or information required to produce a product or service, usually classified as land, labor, or capital.