Which of the Following Is an Example of Economies of Scale

question 343

Multiple Choice

Which of the following is an example of economies of scale?

• A) As the computer industry has expanded, the number of professionally trained computer programmers has also increased, which has caused the salaries of computer programmers to increase.
• B) To attract firms to locate in its state, the state government reduced the tax rate that businesses must pay on its profits, thus lowering the costs to firms who locate in the state.
• C) A firm increases in size and is therefore able to lower its health insurance costs because as the size of the group insured increases, the premium per person decreases substantially.
• D) As the demand for calculators increased, the price of calculators actually fell.

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Definitions:

Employers And Employees

The relationship between individuals who hire and pay for services (employers) and those who provide labor or services in exchange for compensation (employees).

Market Imperfections

occur when the conditions for perfect competition are not met, leading to inefficiencies in the allocation of resources.

Industrial Relations School

A perspective on labor relations emphasizing the importance of institutions, such as unions and labor laws, in shaping work life and labor markets.

Imbalance Of Power

A situation in which there is a disproportionate distribution or exercise of power, often disadvantaging one party in relation to another.