How Large a Firm Becomes Is Determined by

question 41

Multiple Choice

How large a firm becomes is determined by

• A)the demand for its product.
• B)the availability of economies of scale.
• C)the availability of economies of scope.
• D)the availability of specialized managers.

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Definitions:

Concentration Ratio

The concentration ratio is a measure used in economics to assess the level of competition within an industry by indicating the market share controlled by the top firms.

Fast Food Industry

A sector of the food service industry that specializes in quick service, standardized food products, and minimal table service.

Perfect Competitor

An idealized market structure where many firms sell identical products, and there are no barriers to entering or exiting the market.

Total Profit

The overall financial gain made by a business after subtracting all expenses from the total revenue generated.