Economies of Scale Quiz
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Questions and Answers

What do internal economies of scale refer to?

  • The level of output that corresponds to the optimum output
  • Benefits given to the firm from outside the firm
  • The cost advantages that accrue to a firm as the firm increases in size
  • Benefits to the firm originating from the organization itself (correct)
  • When does a firm experience economies of scale?

  • When the firm increases in size
  • When long-run average costs are falling (correct)
  • When long-run average costs are rising
  • When the level of output corresponds to the optimum output
  • What are external economies of scale?

  • Benefits to the firm originating from the organization itself
  • The level of output that corresponds to the optimum output
  • Benefits given to the firm from outside the firm (correct)
  • The cost advantages that accrue to a firm as the firm increases in size
  • What is the optimum output level corresponding to on the long-run average costs curve?

    <p>Point B</p> Signup and view all the answers

    What do economies of scale lead to for a company?

    <p>Increased overall efficiency and competitiveness</p> Signup and view all the answers

    What do external economies of scale refer to?

    <p>Benefits to the firm originating from neighboring firms</p> Signup and view all the answers

    When does a firm experience diseconomies of scale?

    <p>When long-run average costs are rising</p> Signup and view all the answers

    What do internal economies of scale benefit from?

    <p>Benefits from the organization itself</p> Signup and view all the answers

    What is the optimum output level on the long-run average costs curve?

    <p>The level of output that corresponds to the lowest point on the curve</p> Signup and view all the answers

    What are the components of economies of scale in terms of?

    <p>Technical, marketing, financial, managerial, and risk-bearing aspects</p> Signup and view all the answers

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