Economies of Scale Quiz

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Questions and Answers

Which of the following best defines economies of scale in a business?

The fluctuation in production costs based on market demand
The increase in production costs as the scale of production decreases
The constant production costs regardless of the scale of production
The decrease in production costs as the scale of production increases (correct)

What is meant by diseconomies of scale in a business?

The constant production costs regardless of the scale of production
The decrease in production costs as the scale of production increases
The increase in production costs as the scale of production decreases (correct)
The fluctuation in production costs based on market demand

What are internal economies of scale in a business?

The cost disadvantages faced by a business due to its size and scale of operation
The cost advantages gained by a business due to its size and scale of operation (correct)
The cost advantages gained by a business due to external factors such as industry growth
The cost disadvantages faced by a business due to external factors such as industry growth

Which of the following best describes economies of scale in a business?

B. The decrease in production costs as the scale of production increases. (D) Signup and view all the answers

What are diseconomies of scale in a business?

A. The increase in production costs as the scale of production decreases. (D) Signup and view all the answers

What is the difference between internal and external economies of scale in a business?

A. Internal economies of scale refer to cost reductions within a specific business, while external economies of scale refer to cost reductions in the industry as a whole. (C) Signup and view all the answers

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