Which of the Following Is Not a Reason for Economies

question 83

Multiple Choice

Which of the following is not a reason for economies of scale?

• A)Division of labor helps in specialization
• B)Merger of two firms
• C)Hiring larger machines which are more efficient than the smaller ones
• D)Increase in overhead expenses
• E)Research and development

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Definitions:

Price Takers

Firms or individuals who accept the market price as given and have no influence to alter the price of the good or service they are selling or buying.

Four-firm Concentration Ratio

A measurement that indicates the combined market share of the four largest firms in an industry, used to assess the degree of competition within the market.

Herfindahl Index

A measure of market concentration that is used to determine the amount of competition among firms within an industry.

Import Competition

The competition between domestic products and foreign products in a domestic market, affecting local industries.