A Possible Reason for the Existence of Increasing Returns to Scale

question 26

Multiple Choice

A possible reason for the existence of increasing returns to scale is

• A) the inability of a firm to increase all inputs proportionately.
• B) the problems of coordination and control.
• C) higher input prices.
• D) larger fixed costs with a larger plant size.
• E) greater specialization.

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Definitions:

Regional

Pertaining to or characteristic of a specific geographic area or region, often used to describe businesses, cuisines, languages, or cultures unique to that area.

Economic

Pertaining to the production, distribution, and consumption of goods and services, or the material welfare of humans.

Political

Relating to the government or public affairs of a country.

National

Pertaining to or characteristic of a whole nation or country, as opposed to local or regional characteristics.