When There Are External Economies of Scale, an Increase in the Size

question 24

Multiple Choice

When there are external economies of scale, an increase in the size of the market will

• A) not affect the number of firms, but will lower the price per unit.
• B) decrease the number of firms and lower the price per unit.
• C) decrease the number of firms and raise the price per unit.
• D) increase the number of firms and raise the price per unit.
• E) increase the number of firms and lower the price per unit.

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Definitions:

Hardy-Weinberg Equilibrium

Mathematical law stating that the gene frequencies in a population remain stable if evolution does not occur due to nonrandom mating, selection, migration, and genetic drift.

Nonrandom Mating

Mating among individuals on the basis of their phenotypic similarities or differences, rather than mating on a random basis.

Gene Flow

Sharing of genes between two populations through interbreeding.

Genetic Drift

A mechanism of evolution that results in change in the genetic makeup of a population by chance or random events rather than by natural selection.