Which of the following could be a reason a firm might experience economies of scale?
A)Specialization
B)Ability to sell in other nations
C)Inability to use large machinery
D)Increased bureaucratization
E)All of these

Question

Quizplus · Accepted Answer

Specialization is a reason a firm might experience economies of scale. When a firm produces a large quantity of a product, it is able to specialize in particular tasks, which leads to lower costs and increased efficiency.

Answer: B 
 Ability to sell in other nations can be a reason a firm might experience economies of scale. By selling their products in other nations, firms can increase their production volumes, which can lead to lower per-unit costs due to economies of scale.

Answer: C 
 Inability to use large machinery is not a reason a firm might experience economies of scale. The ability to use large machinery can often lead to greater efficiency and lower per-unit costs due to economies of scale.

Answer: D 
 Increased bureaucratization is not a reason a firm might experience economies of scale. In fact, too much bureaucracy can lead to increased costs and reduced efficiency, which is the opposite of economies of scale.

Answer: A and B 
 Specialization and ability to sell in other nations are both reasons a firm might experience economies of scale.

Which of the Following Could Be a Reason a Firm