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:

Planning

The process of setting objectives and determining the actions necessary to achieve them.

Product Cost

The total cost associated with making a product, including direct labor, materials, and manufacturing overhead.

Period Cost

Expenses that are incurred by a business during a specific period but are not directly tied to the production process, such as administrative and selling expenses.

Property Taxes

Taxes paid by property owners to local or state authorities based on the assessed value of their property.