Firms experience economies of scale for several reasons. What is one such reason? A firm might experience economies of scale because A. large firms may be able to purchase inputs at lower costs than smaller competitors. B. a firm's technology may make it impossible to increase production without a larger proportional increase input usage. C. managers experience diminishing returns, decreasing their marginal productivity as output expands. D. managers begin to have difficulty coordinating the operation of the firm. E. as a firm expands, it may have to borrow money at a higher interest rate.
Firms experience economies of scale for several reasons. What is one such reason? A firm might experience economies of scale because A. large firms may be able to purchase inputs at lower costs than smaller competitors. B. a firm's technology may make it impossible to increase production without a larger proportional increase input usage. C. managers experience diminishing returns, decreasing their marginal productivity as output expands. D. managers begin to have difficulty coordinating the operation of the firm. E. as a firm expands, it may have to borrow money at a higher interest rate.
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 4.10P
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Transcribed Image Text:Firms experience economies of scale for several reasons. What is one such reason?
A firm might experience economies of scale because
A. large firms may be able to purchase inputs at lower costs than smaller competitors.
B. a firm's technology may make it impossible to increase production without a larger proportional increase input usage.
C. managers experience diminishing returns, decreasing their marginal productivity as output expands.
D. managers begin to have difficulty coordinating the operation of the firm.
E. as a firm expands, it may have to borrow money at a higher interest rate.
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