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Economies of Scale Most Often Occur in Industries Whose Initial

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Economies of scale most often occur in industries whose initial fixed cost of plant and equipment is low.


Definitions:

Good A

A placeholder term typically used in economic models to represent a generic item or service in the market.

Income Falls

A situation where an individual's or group's earnings decrease over a period of time.

Normal Good

A good for which an increase in income raises the quantity demanded.

Inferior Good

A type of good for which demand decreases as the income of consumers increase, unlike normal goods for which demand increases with an increase in income.

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