Economies of Scale Are Present Where the Cost of Producing

question 4

Multiple Choice

Economies of scale are present where the cost of producing each unit declines as the quantity of product produced increases.In this environment, large-scale firms have a cost advantage.Thus, economies of scale serve to ____the cost of entry into an industry.

• A)increase
• B)decrease

---

Definitions:

Formal Agreement

A legally binding contract between two or more parties, often written and signed, outlining the terms and obligations each party agrees to.

Business for Profit

A business for profit is an organization engaged in commercial, industrial, or professional activities with the primary goal of earning financial gain.

Insect Farm

A facility dedicated to breeding and raising insects for various purposes, including animal feed, human consumption, or agricultural benefits.

Medicinal Uses

Pertains to the application or use of substances in the treatment, prevention, or diagnosis of disease or other medical conditions.