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:

Full Employment

An economic scenario where every available workforce is employed in the most financially efficient method.

Classical Theory

in economics, refers to a school of thought that emphasizes free markets, the role of competition, and the minimal intervention of government in the economy, foundational to later economic theories.

Wages And Prices

The relationship and dynamics between the compensation paid to labor and the cost of goods and services in an economy.

Full Employment

A situation in an economy where all available labor resources are being used in the most efficient way possible, typically reflected by the absence of cyclical unemployment.