Refer to Figure 8

question 55

Multiple Choice

Refer to Figure 8.7.Which of the following statements is true?

• A) The technology represented in graph A will cause the firm to experience diseconomies of scale.
• B) The technology represented in graph B will cause the firm to experience diseconomies of scale.
• C) The technology represented in graph B will cause the firm to experience economies of scale.
• D) The technology represented in graph C will cause the firm to experience diseconomies of scale.

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Definitions:

Cutthroat Competition

An extremely aggressive competition where companies use strategies to undercut their rivals' prices.

Cartel

A coalition of producers or vendors aimed at keeping prices elevated by limiting competitive practices.

Concentration Ratio

Concentration ratio is a measure of the total output produced in an industry by a given number of firms, indicating the level of market competition.

Sales

The activities involved in selling goods or services to consumers or other businesses, generating revenue.