Economies of Scale Can Be Caused by All of the Following

question 125

Multiple Choice

Economies of scale can be caused by all of the following except:

• A) price discounts for large scale purchases.
• B) labor specialization.
• C) use of more productive equipment.
• D) increases in the firm's average total cost.
• E) more cost-efficient methods of marketing.

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Definitions:

Market Price

The contemporary selling or buying price of goods or services in a commercial arena.

Short-Run Supply Curve

The short-run supply curve represents the relationship between price and quantity supplied over a short period, during which at least one input, such as plant size, is fixed.

Optimal Output

The level of production at which a firm maximizes its profits, determined by equating marginal cost and marginal revenue.

Market Price

The current market valuation at which services or products are exchanged.