The Existence of Internal Economies of Scale

question 10

Multiple Choice

The existence of internal economies of scale

• A) cannot be associated with a perfectly competitive industry.
• B) may be associated with a perfectly competitive industry.
• C) is associated only with sophisticated products such as aircraft.
• D) cannot form the basis for international trade.
• E) focuses more on the industry than individual firms.

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Definitions:

Compounded Annually

The process of calculating interest on both the initial principal and the accumulated interest from previous periods on an annual basis.

Yearly Contributions

These are amounts of money contributed to any type of savings or investment plan on an annual basis.

Rate of Interest

The percentage of the principal charged by the lender for the use of its money.

Compounded Quarterly

Interest calculation method where the interest is added to the principal four times annually, leading to increased growth over time due to the quarterly compounding effect.