If There Are Significant Economies of Scale in an Industry

question 27

Multiple Choice

If there are significant economies of scale in an industry, then

• A) a firm that is large may be able to produce at a lower unit cost than can a small firm.
• B) a firm that is large will have to charge a higher price than will a small firm.
• C) entry to that industry will be easy.
• D) firms must differentiate their products to earn economic profits.

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Definitions:

Market Data

Information related to prices, supply, demand, and dynamics of the market that helps businesses to make informed decisions.

Walmart

A multinational retail corporation operating a chain of hypermarkets, discount department stores, and grocery stores, known for its extensive product selection and low prices.

Corporate Vertical Marketing System

A structured form of marketing system where subsequent stages of production and distribution are under a single ownership.

Parent Company

A company that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors.