The Larger the Minimum Efficient Scale of Firms, Ceteris Paribus

question 86

Multiple Choice

The larger the minimum efficient scale of firms, ceteris paribus, the

• A) more likely a concentrated market will improve allocative efficiency.
• B) greater the number of firms comprising an industry.
• C) greater the tendency toward monopoly inefficiency.
• D) lower the advantages of large- scale production.
• E) more likely a concentrated market will improve productive efficiency.

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Definitions:

Dividend Yield

A financial ratio that indicates how much a company pays out in dividends each year relative to its stock price, often used by investors to assess the income-generating ability of a stock.

Market Price

The current price at which a good or service can be bought or sold in the open market.

Cash Dividends

Payments made by a corporation to its shareholder members. It is the share of profits distributed.

Retained Earnings

The portion of net income left over for the business after it has paid out dividends to its shareholders, often reinvested in the business.