If an Industry Is Characterized by Economies of Scale

question 20

Multiple Choice

If an industry is characterized by economies of scale:

• A)barriers to entry are usually not very large.
• B)long-run average costs of production increase as the quantity the firm produces increases.
• C)capital requirements are small due to the efficiency of the large-scale operations.
• D)the costs of entry into the market are likely to be substantial.

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Definitions:

Specializing Exclusively

Involves focusing production or economic activities on a single area or product to maximize efficiency and expertise.

Recession

A momentary economic deflationary period, seen in reduced levels of trade and manufacturing, commonly characterized by a GDP drop for two sequential quarters.

Efficiently

Achieving maximum productivity with minimum wasted effort or expense, often related to the optimal use of resources.

Economic Growth

An increase in the production of economic goods and services, compared from one period of time to another. It can be measured in nominal or real terms, the latter of which is adjusted for inflation.