If an industry is characterized by economies of scale then - (1) barriers to entry are not very large (2) long run unit costs of production decreases as the quantity the firm produces increases (3) capital requirement are small due to the efficiency of the large scale operation (4) the costs of entry into the market are likely to be substantial

If an industry is characterized by economies of scale then - (1) barriers to entry are not very large (2) long run unit costs of production decreases as the quantity the firm produces increases (3) capital requirement are small due to the efficiency of the large scale operation (4) the costs of entry into the market are likely to be substantial
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(2) long run unit costs of production decreases as the quantity the firm produces increases Explanation: In microeconomics, economies of scale are the cost advantages that an enterprise obtains due to expansion. There are factors that cause a producer's average cost per unit to fall as the scale of output is increased. "Economies of scale" is a long run concept and refers to reductions in unit cost as the size of a facility and the usage levels of other inputs increase.
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If an industry is characterised by economies of scale then (1) barriers to entry are not very large (2) long run unit costs of production decreases as the quantity the firm produces increases (3) capital requirement are small due to the efficiency of the large scale operation (4) the costs of entry into the market are likely to be substantial

Description : If an industry is characterised by economies of scale then (1) barriers to entry are not very large (2) long run unit costs of production decreases as the quantity the firm produces increases (3) ... of the large scale operation (4) the costs of entry into the market are likely to be substantial 

Last Answer : long run unit costs of production decreases as the quantity the firm produces increases

New entrants to an industry are more likely when (i.e., entry barriers are low when…) A. It is difficult to gain access to distribution channels. B. Economies of scale in the industry are high. C. Product differentiation in the industry is low. D. Capital requirements in the industry are high.

Description : New entrants to an industry are more likely when (i.e., entry barriers are low when…) A. It is difficult to gain access to distribution channels. B. Economies of scale in the industry are high. C. Product differentiation in the industry is low. D. Capital requirements in the industry are high.

Last Answer : Product differentiation in the industry is low.

New entrants to an industry are more likely when (i.e., entry barriers are low when…) A. It is difficult to gain access to distribution channels. B. Economies of scale in the industry are high. C. Product differentiation in the industry is low. D. Capital requirements in the industry are high.

Description : New entrants to an industry are more likely when (i.e., entry barriers are low when…) A. It is difficult to gain access to distribution channels. B. Economies of scale in the industry are high. C. Product differentiation in the industry is low. D. Capital requirements in the industry are high.

Last Answer : Product differentiation in the industry is low.

The main advantage of specialization results from (a) The economies of large scale production (b) The specializing country behaves like a monopoly © Smaller production runs resulting in lower unit costs. (d) High wages paid to foreign workers.

Description : The main advantage of specialization results from (a) The economies of large scale production (b) The specializing country behaves like a monopoly © Smaller production runs resulting in lower unit costs. (d) High wages paid to foreign workers.

Last Answer : (a) The economies of large scale production

Economies of a firm are : (1) An increase in its profits (2) A reduction in its selling expenses (3) Its dominance of the market (4) Saving in it's production costs

Description : Economies of a firm are : (1) An increase in its profits (2) A reduction in its selling expenses (3) Its dominance of the market (4) Saving in it's production costs

Last Answer : (4) Saving in it's production costs Explanation: Economics of a firm includes how it combines labour and capital so as to lower the average cost of output, either from increasing, decreasing, or constant returns ... of a good or a service on a larger scale, yet with (on average) less input costs.

Economies of a firm are : (1) An increase in its profits (2) A reduction in its selling expenses (3) Its dominance of the market (4) Saving in it’s production costs

Description : Economies of a firm are : (1) An increase in its profits (2) A reduction in its selling expenses (3) Its dominance of the market (4) Saving in it’s production costs 

Last Answer : Saving in it’s production costs

Which of the following is necessary for a natural monopoly? a. economies of scale b. a high proportion of the total cost is the cost of capital goods c. the market is very small d. all of the above

Description : Which of the following is necessary for a natural monopoly? a. economies of scale b. a high proportion of the total cost is the cost of capital goods c. the market is very small d. all of the above

Last Answer : d. all of the above

The positively sloped part of long run cost curve of a firm is due to (a) Economies of scale ; (b) Diseconomies of scale; (c) Diminishing returns to scale ; (d) Marginal utility theory

Description : The positively sloped part of long run cost curve of a firm is due to (a) Economies of scale ; (b) Diseconomies of scale; (c) Diminishing returns to scale ; (d) Marginal utility theory

Last Answer : (b) Diseconomies of scale;

Which industrial sector promotes small-scale businesses and Entrepreneurship, and has lower barriers to market entry? A. Service. B. Manufacturing. C. Distribution. D. Agriculture.

Description : Which industrial sector promotes small-scale businesses and Entrepreneurship, and has lower barriers to market entry? A. Service. B. Manufacturing. C. Distribution. D. Agriculture.

Last Answer : A. Service.

Which one of the following is not a feature of monopoly? (1) Single seller of the product (2) Heavy selling costs (3) Barriers to entry of new firms (4) Price discriminations

Description : Which one of the following is not a feature of monopoly? (1) Single seller of the product (2) Heavy selling costs (3) Barriers to entry of new firms (4) Price discriminations

Last Answer : (2) Heavy selling costs Explanation: Heavy selling cost is one of the defining features of an oligopoly. Firms resort to heavy selling cost to attract customers. Under this market ... mainly by heavy advertising and promotional expenditure that ultimately adds to the total selling cost.

Which one of the following is not a feature of monopoly ? (1) Single seller of the product (2) Heavy selling costs (3) Barriers to entry of new firms (4) Price discriminations

Description : Which one of the following is not a feature of monopoly ? (1) Single seller of the product (2) Heavy selling costs (3) Barriers to entry of new firms (4) Price discriminations

Last Answer : Heavy selling costs

A product or service that customers have come to expect from an industry, which must be offered by new entrants if they wish to compete and survive, is known as a(n)? a. Switching costs b. Loyalty programs c. Entry barriers d. Affiliate programs

Description : A product or service that customers have come to expect from an industry, which must be offered by new entrants if they wish to compete and survive, is known as a(n)? a. Switching costs b. Loyalty programs c. Entry barriers d. Affiliate programs

Last Answer : c. Entry barriers

Economies of Scale means reduction in (1) unit cost of production (2) unit cost of distribution (3) total cost of production (4) total cost of distribution

Description : Economies of Scale means reduction in (1) unit cost of production (2) unit cost of distribution (3) total cost of production (4) total cost of distribution

Last Answer : (1) unit cost of production Explanation: In microeconomics, economies of scale are the cost advantages that an enterprise obtains due to expansion. "Economies of scale" is a long run concept and refers ... in unit cost as the size of a facility and the usage levels of other inputs increase.

Economies of Scale means reduction in (1) unit cost of production (2) unit cost of distribution (3) total cost of production (4) total cost of distribution

Description : Economies of Scale means reduction in (1) unit cost of production (2) unit cost of distribution (3) total cost of production (4) total cost of distribution

Last Answer : unit cost of production 

Which of the following is NOT an entry barrier to an industry? A. None of these B. Economies of scale C. Customer loyalty D. Bargaining power of suppliers

Description : Which of the following is NOT an entry barrier to an industry? A. None of these B. Economies of scale C. Customer loyalty D. Bargaining power of suppliers

Last Answer : Bargaining power of suppliers

Which of the following is NOT an entry barrier to an industry? A. None of these B. Economies of scale C. Customer loyalty D. Bargaining power of suppliers

Description : Which of the following is NOT an entry barrier to an industry? A. None of these B. Economies of scale C. Customer loyalty D. Bargaining power of suppliers

Last Answer : Bargaining power of suppliers

If a firm is operating at loss in the shortperiod in perfect combination, it should : (1) decrease the production and the price. (2) increase the production and the price (3) continue to operate as long as it covers even the variable costs. (4) shut-down and leave the industry

Description : If a firm is operating at loss in the shortperiod in perfect combination, it should : (1) decrease the production and the price. (2) increase the production and the price (3) continue to operate as long as it covers even the variable costs. (4) shut-down and leave the industry

Last Answer : (3) continue to operate as long as it covers even the variable costs. Explanation: The demand for labour is "derived- from the production and demand for the product being demanded. If the demand ... price and production numbers are met. Labour is "derived" from the market demand for the product.

If a firm is operating at loss in the short-period in perfect combination, it should : (1) decrease the production and the price. (2) increase the production and the price (3) continue to operate as long as it covers even the variable costs. (4) shut-down and leave the industry

Description : If a firm is operating at loss in the short-period in perfect combination, it should : (1) decrease the production and the price. (2) increase the production and the price (3) continue to operate as long as it covers even the variable costs. (4) shut-down and leave the industry

Last Answer : continue to operate as long as it covers even the variable costs.

Under perfect competition, the industry does not have any excess capacity because each firm produces at the minimum point on its - (1) long-run marginal cost curve (2) long-run average cost curve (3) long-run average variable cost curve (4) long-run average revenue curve

Description : Under perfect competition, the industry does not have any excess capacity because each firm produces at the minimum point on its - (1) long-run marginal cost curve (2) long-run average cost curve (3) long-run average variable cost curve (4) long-run average revenue curve

Last Answer : (2) long-run average cost curve Explanation: Under perfect competition, the firms operate at the minimum point of long-run average cost curve. In this way, the actual longrun output of ... ideal output. This gives the mea-sure of excess capacity which lies unutilized under imperfect competition.

Under perfect competition, the industry does not have any excess capacity because each firm produces at the minimum point on its (1) long-run marginal cost curve (2) long-run average cost curve (3) long-run average variable cost curve (4) long-run average revenue curve

Description : Under perfect competition, the industry does not have any excess capacity because each firm produces at the minimum point on its (1) long-run marginal cost curve (2) long-run average cost curve (3) long-run average variable cost curve (4) long-run average revenue curve

Last Answer : long-run average cost curve

In short run, if a competitive firm incurs losses, it will - (1) stop production. (2) continue to produce as long as it can cover its variable costs. (3) raise price of its product. (4) go far advertising campaign.

Description : In short run, if a competitive firm incurs losses, it will - (1) stop production. (2) continue to produce as long as it can cover its variable costs. (3) raise price of its product. (4) go far advertising campaign.

Last Answer : (1) stop production. Explanation: In the short run, a firm that is operating at a loss (where the revenue is less that the total cost or the price is less than the unit cost) must ... will shutdown if the sale of the goods or services produced cannot even cover the variable costs of production.

In short run, if a competitive firm incurs losses, it will (1) stop production. (2) continue to produce as long as it can cover its variable costs. (3) raise price of its product. (4) go far advertising campaign.

Description : In short run, if a competitive firm incurs losses, it will (1) stop production. (2) continue to produce as long as it can cover its variable costs. (3) raise price of its product. (4) go far advertising campaign.

Last Answer : stop production.

Internal economies - (1) arise when there is expansion in an industry. (2) arise in an economy as it makes progress. (3) accrue to a firm when it expands its output. (4) arise when there is expansion in internal trade.

Description : Internal economies - (1) arise when there is expansion in an industry. (2) arise in an economy as it makes progress. (3) accrue to a firm when it expands its output. (4) arise when there is expansion in internal trade.

Last Answer : (1) arise when there is expansion in an industry. Explanation: Internal economies are those economies in production-those reductions in production costs-which accrue to the firm itself when it expands its ... of its own expansion independent of the size and expansion of the industry as a whole.

Internal economies (1) arise when there is expansion in an industry. (2) arise in an economy as it makes progress. (3) accrue to a firm when it expands its output. (4) arise when there is expansion in internal trade.

Description : Internal economies (1) arise when there is expansion in an industry. (2) arise in an economy as it makes progress. (3) accrue to a firm when it expands its output. (4) arise when there is expansion in internal trade.

Last Answer : arise when there is expansion in an industry.

Which of the following is not a driver of globalization? A. The fragmentation of consumer tastes between countries. B. The competitive process. C. Multinational companies successfully persuading governments to lower trading barriers. D. The need to gain economies of scale.

Description : Which of the following is not a driver of globalization? A. The fragmentation of consumer tastes between countries. B. The competitive process. C. Multinational companies successfully persuading governments to lower trading barriers. D. The need to gain economies of scale.

Last Answer : The competitive process.

Which of the following is a driver of globalization? A. Trade barriers and controls on inflows of foreign direct investment. B. Weak competition. C. Technological advance. D. Economies of scale are being exploited to the maximum.

Description : Which of the following is a driver of globalization? A. Trade barriers and controls on inflows of foreign direct investment. B. Weak competition. C. Technological advance. D. Economies of scale are being exploited to the maximum.

Last Answer : Trade barriers and controls on inflows of foreign direct investment.

The definition of 'small-scale industry' in India is based on - (1) sales by the unit (2) Investment In machines and equipments (3) market coverage (4) export capacity

Description : The definition of 'small-scale industry' in India is based on - (1) sales by the unit (2) Investment In machines and equipments (3) market coverage (4) export capacity

Last Answer : (2) Investment In machines and equipments Explanation: Generally, small-scale sector is defined in terms of investment ceilings on the original value of the installed plant and machinery. As per ... -scale and large-scale industries. This limit is being continuously raised up wards by government.

The definition of ‘small-scale industry’ in India is based on (1) sales by the unit (2) investment in machines and equipments (3) market coverage (4) export capacity

Description : The definition of ‘small-scale industry’ in India is based on (1) sales by the unit (2) investment in machines and equipments (3) market coverage (4) export capacity

Last Answer : investment in machines and equipments

.Free trade is based on the principle of (a) Comparative advantage (b) Comparative scale © Economies of advantage (d) Production possibility advantage

Description : .Free trade is based on the principle of (a) Comparative advantage (b) Comparative scale © Economies of advantage (d) Production possibility advantage

Last Answer : (a) Comparative advantage

To maximize market share, a firm may use _____________ pricing, which is based on the theory that as sales volume increases, unit costs will decrease. A. Market-penetration B. Market-skimming C. Value pricing D. Demand pricing E. Price bands

Description : To maximize market share, a firm may use _____________ pricing, which is based on the theory that as sales volume increases, unit costs will decrease. A. Market-penetration B. Market-skimming C. Value pricing D. Demand pricing E. Price bands

Last Answer : A. Market-penetration

The negatively sloped part of long run cost curve of a firm is due to (a) Increase in production due to specialization and division of labour; (b) Diseconomies of scale ; (c) Diminishing returns to scale ; (d) Marginal utility theory

Description : The negatively sloped part of long run cost curve of a firm is due to (a) Increase in production due to specialization and division of labour; (b) Diseconomies of scale ; (c) Diminishing returns to scale ; (d) Marginal utility theory

Last Answer : (a) Increase in production due to specialization and division of labour;

It is much easier for a small animal to run uphill than for a large animal, because (a) small animals have a lower O2 requirement (b) the efficiency of muscles in large animals is less than in the small animals (c) it is easier to carry a small body weight (d) smaller animals have a higher metabolic rate.

Description : It is much easier for a small animal to run uphill than for a large animal, because (a) small animals have a lower O2 requirement (b) the efficiency of muscles in large animals is less than in the ... (c) it is easier to carry a small body weight (d) smaller animals have a higher metabolic rate.

Last Answer : (d) smaller animals have a higher metabolic rate.

)If the average total cost is Rs.54, total fixed cost is Rs.45000 and quantity produced is 2500 units, find the average variable costs (in Rs.) of the firm - (1) 24 (2) 18 (3) 36 (4) 60

Description : )If the average total cost is Rs.54, total fixed cost is Rs.45000 and quantity produced is 2500 units, find the average variable costs (in Rs.) of the firm - (1) 24 (2) 18 (3) 36 (4) 60

Last Answer : (3) 36 Explanation: The standard method of calculating average variable cost is to divide total variable cost by the quantity, illustrated by this equation : Average Variable Cost = Total Variable Cost/ Quantity of ... , Average Total Cost = 45000/2500 = 18 So Average Variable Cost = 54 - 18= 36

If the average total cost is Rs. 54, total fixed cost is Rs. 45000 and quantity produced is 2500 units, find the average variable costs (in Rs.) of the firm : (1) 24 (2) 18 (3) 36 (4) 60

Description : If the average total cost is Rs. 54, total fixed cost is Rs. 45000 and quantity produced is 2500 units, find the average variable costs (in Rs.) of the firm : (1) 24 (2) 18 (3) 36 (4) 60

Last Answer : 36

The use of a freight forwarder A)is not always economical for a small firm. B)usually increases transit time and shipping costs. C)usually increases transit time and sometimes lowers shipping costs. D)lowers shipping costs for a large firm. E)usually reduces transit time.

Description : The use of a freight forwarder A)is not always economical for a small firm. B)usually increases transit time and shipping costs. C)usually increases transit time and sometimes lowers shipping costs. D)lowers shipping costs for a large firm. E)usually reduces transit time.

Last Answer : E)usually reduces transit time.

Which of the following is a characteristic of pure monopoly? a. one seller of the product b. low barriers to entry c. close substitute products d. perfect informatio

Description : Which of the following is a characteristic of pure monopoly? a. one seller of the product b. low barriers to entry c. close substitute products d. perfect informatio

Last Answer : a. one seller of the product

According to the five factors model, an attractive industry would have all of the following characteristics EXCEPT: A. Low barriers to entry. B. Suppliers with low bargaining power. C. A moderate degree of rivalry among competitors. D. Few good product substitutes.

Description : According to the five factors model, an attractive industry would have all of the following characteristics EXCEPT: A. Low barriers to entry. B. Suppliers with low bargaining power. C. A moderate degree of rivalry among competitors. D. Few good product substitutes.

Last Answer : Low barriers to entry.

According to the five factors model, an attractive industry would have all of the following characteristics EXCEPT: A. Low barriers to entry. B. Suppliers with low bargaining power. C. A moderate degree of rivalry among competitors. D. Few good product substitutes.

Description : According to the five factors model, an attractive industry would have all of the following characteristics EXCEPT: A. Low barriers to entry. B. Suppliers with low bargaining power. C. A moderate degree of rivalry among competitors. D. Few good product substitutes.

Last Answer : A moderate degree of rivalry among competitors.

A business is able to reduce total cost by spreading fixed costs across a wider range of products. This is known as…. A. Economies of Scope B. The Experience Curve C. Economies of Capacity D. Economies of Scale

Description : A business is able to reduce total cost by spreading fixed costs across a wider range of products. This is known as…. A. Economies of Scope B. The Experience Curve C. Economies of Capacity D. Economies of Scale

Last Answer : Economies of Scale

A business is able to reduce total cost by spreading fixed costs across a wider range of products. This is known as…. A. Economies of Scope B. The Experience Curve C. Economies of Capacity D. Economies of Scale

Description : A business is able to reduce total cost by spreading fixed costs across a wider range of products. This is known as…. A. Economies of Scope B. The Experience Curve C. Economies of Capacity D. Economies of Scale

Last Answer : Economies of Scale

As the number of investments made by a firm increases, its internal rate of return - (1) declines due to diminishing marginal productivity. (2) declines because the market rate of interest will fall, ceteris paribus. (3) increases to compensate the firm for the current consumption foregone. (4) increases because the level of savings will fall.

Description : As the number of investments made by a firm increases, its internal rate of return - (1) declines due to diminishing marginal productivity. (2) declines because the market rate of interest will ... the firm for the current consumption foregone. (4) increases because the level of savings will fall.

Last Answer : (3) increases to compensate the firm for the current consumption foregone. Explanation: Internal rates of return are commonly used to evaluate the desirability of investments or projects. The higher a ... of return is greater than an established minimum acceptable rate of return or cost of capital.

As the number of investments made by a firm increases, its internal rate of return (1) declines due to diminishing marginal productivity. (2) declines because the market rate of interest will fall, ceteris paribus. (3) increases to compensate the firm for the current consumption foregone. (4) increases because the level of savings will fall.

Description : As the number of investments made by a firm increases, its internal rate of return (1) declines due to diminishing marginal productivity. (2) declines because the market rate of interest will fall ... firm for the current consumption foregone. (4) increases because the level of savings will fall.

Last Answer :  increases to compensate the firm for the current consumption foregone.

By using a wholesaler, Inversoft Ltd. has a distinct advantage because the specialised services performed by the wholesaler allow the firm to: A)focus on developing and manufacturing products that match consumers' needs and wants. B)focus on increasing production capacity and efficiency C)reduce manufacturing costs to retailers and provide quality merchandise to consumers.

Description : By using a wholesaler, Inversoft Ltd. has a distinct advantage because the specialised services performed by the wholesaler allow the firm to: A)focus on developing and manufacturing ... capacity and efficiency C)reduce manufacturing costs to retailers and provide quality merchandise to consumers.

Last Answer : A)focus on developing and manufacturing products that match consumers' needs and wants.

Which from the following is not true when the interest rate in the economy goes up? (1) Saving increases (2) Lending decreases (3) Cost of production increases (4) Return on capital increases

Description : Which from the following is not true when the interest rate in the economy goes up? (1) Saving increases (2) Lending decreases (3) Cost of production increases (4) Return on capital increases

Last Answer : (4) Return on capital increases Explanation: The interest rate is the cost of demanding or borrowing loanable funds. Alternatively, the interest rate is the rate of return from supplying or lending loanable funds. ... rate per unit of time, which is why it is called the rate of return on capital.

Which from the following is not true when the interest rate in the economy goes up ? (1) Saving increases (2) Lending decreases (3) Cost of production increases (4) Return on capital increases

Description : Which from the following is not true when the interest rate in the economy goes up ? (1) Saving increases (2) Lending decreases (3) Cost of production increases (4) Return on capital increases

Last Answer : Return on capital increases

Capital : Output Ratio of a measures - (1) its per unit cost of production (2) the amount of capital invested per unit of output (3) the ratio of capital depreciation to quantity of output (4) the ratio of working capital employed to quantity of output

Description : Capital : Output Ratio of a measures - (1) its per unit cost of production (2) the amount of capital invested per unit of output (3) the ratio of capital depreciation to quantity of output (4) the ratio of working capital employed to quantity of output

Last Answer : (2) the amount of capital invested per unit of output Explanation: Capital output ratio is the ratio of capital used to produce an output over a period of time. This ratio has a tendency to be ... its resources in lieu of capital to boost its output; hence the resulting capital output ratio is low.

Capital output ratio of a commodity measures - (1) its per unit cost of production (2) the amount of capital invested per unit of output (3) the ratio of capital depreciation to quantity of output (4) the ratio of working capital employed to quantity of output

Description : Capital output ratio of a commodity measures - (1) its per unit cost of production (2) the amount of capital invested per unit of output (3) the ratio of capital depreciation to quantity of output (4) the ratio of working capital employed to quantity of output

Last Answer : (2) the amount of capital invested per unit of output Explanation: Capital Output Ratio is the ratio of capital used to produce an output over a period of time. This ratio has a tendency ... order to increase the output. When countries use their natural resources instead of capital then COR reduces.

Capital output ratio of a commodity measures (1) its per unit cost of production (2) the amount of capital invested per unit of output (3) the ratio of capital depreciation to quantity of output (4) the ratio of working capital employed to quantity of output

Description : Capital output ratio of a commodity measures (1) its per unit cost of production (2) the amount of capital invested per unit of output (3) the ratio of capital depreciation to quantity of output (4) the ratio of working capital employed to quantity of output

Last Answer : the amount of capital invested per unit of output

In the short run if the price is above the average total cost in a monopolistic competitive market, the firm makes (a) Profits and new firms join the market ; (b) Profit and bar entry to new firms; (c) Makes losses and exit the market ; (d) Quick profit and disappears

Description : In the short run if the price is above the average total cost in a monopolistic competitive market, the firm makes (a) Profits and new firms join the market ; (b) Profit and bar entry to new firms; (c) Makes losses and exit the market ; (d) Quick profit and disappears

Last Answer : (a) Profits and new firms join the market ;