The Fact That a Large Company Can Enjoy Savings from Producing

question 43

Multiple Choice

The fact that a large company can enjoy savings from producing goods in high volume that are not available to a small company is called ________.

• A) economies of scale
• B) horizontal integration
• C) vertical integration
• D) economies of scope

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Definitions:

Price Floor

A government or regulatory-imposed minimum price for goods or services, intended to prevent prices from dropping too low.

Shortage

A circumstance in which the market desire for a service or product is greater than the supply.

Surplus

The situation in which the quantity supplied of a product exceeds the quantity demanded, often leading to price decreases.

Price Ceiling

A government-imposed limit on how high a price can be charged for a product or service, intended to protect consumers.