Why Does Specialization Become More Profitable on a Larger Scale

question 78

Multiple Choice

Why does specialization become more profitable on a larger scale? I. Large firms are more profitable than small firms. II. Cost efficiencies become possible when the production scale is significantly large relative to the cost of the machines being used. III. Large-scale production justifies the acquisition of more knowledge on a specific activity.

• A) I and II only
• B) I, II, and III
• C) I and III only
• D) II and III only

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Definitions:

Orange Juice

A liquid extract of the orange tree fruit, consumed as a beverage or used in culinary dishes and as a commodity traded on futures markets.

Futures Contracts

Standardized legal agreements to buy or sell a financial instrument or physical commodity at a predetermined future date and price.

Profit (Loss)

The financial gain or loss resulting from revenue generated minus the expenses of operating the business.

Ounce

A unit of weight commonly used in the United States and the United Kingdom, equal to 1/16 of a pound or approximately 28.35 grams.