Internal Scale Economies Occur When

question 2

Multiple Choice

Internal scale economies occur when:

• A)expansion of output by a firm leads to greater specialization of labor.
• B)expansion in an industry drives down the input prices.
• C)industry growth leads to a greater diffusion of knowledge among firms.
• D)a firm pays higher input prices to expand production.

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Definitions:

Monopsony

Market with only one buyer.

Public Goods

Public goods are commodities or services that are provided without profit to all members of a society, either by the government or a private individual or organization.

Nonexclusive Good

Good that people cannot be excluded from consuming, so that it is difficult or impossible to charge for its use.

Exclusive Good

A product or service that is only available to a specific group of consumers or requires special access, often characterized by high quality and price.