When Economies of Scale Are Large,firms Can Reduce Their Average

question 45

Multiple Choice

When economies of scale are large,firms can reduce their average total cost by:

• A) selling off their subsidiaries.
• B) merging into even larger firms.
• C) eliminating the bureaucratic costs.
• D) hiring professional managers.

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Definitions:

High-Opportunity Cost

Refers to the high value or benefit that is foregone from not choosing the next best alternative with available resources.

Low-Opportunity Cost

Describes a situation where choosing one option over another entails a minimal sacrifice of alternative opportunities or benefits.

International Trade

The trading of products, services, and financial assets between different countries or territories.

Production

The process of creating goods or services by combining labor, capital, and resources to meet consumer demands or needs.