CIMA BA1 · Chapter 7 · Question 4 of 11
Which of the following is an EXTERNAL economy of scale?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) A pool of skilled labour developing in a region where the industry is concentrated
Explanation
External economies arise from the growth of the industry as a whole, benefiting all firms in it, such as specialised local labour, suppliers and infrastructure. The other options are internal economies arising from the size of the individual firm.
More Costs, revenue and market structures MCQs
- Q6A profit-maximising firm will produce at the output where:
- Q7In the short run, a perfectly competitive firm making a loss should continue to produce as long as:
- Q8Compared with a perfectly competitive industry with the same cost conditions, a profit-maximising monopolist will normally:
- Q9The kinked demand curve model of oligopoly is used to explain:
- Q10In long-run equilibrium under monopolistic competition, a typical firm: