Economies of Scale Exist as a Firm Increases Its Size

question 17

Multiple Choice

Economies of scale exist as a firm increases its size in the long run because of all of the following except

• A)the firm can afford more sophisticated technology in production.
• B)labour and management can specialise even further in their tasks.
• C)as a larger input buyer, the firm can purchase inputs at a lower per unit cost.
• D)as a firm expands its production, its profit margin per unit of output increases.

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Definitions:

Hypothesis

A tentative statement about a particular relationship (between objects, people, or groups of people) that can be tested empirically.

Tentative Statement

A provisionary or preliminary statement made with uncertainty, subject to further verification or investigation.

Deductive Presupposition

A logical process where general principles are applied to make specific assumptions or deductions.

Dependent Variable

In research, it's the variable being tested and measured, which is expected to change as a result of manipulations of the independent variable.