Which of the following best assesses the significance of economies of scale for individual farmers in the late nineteenth century?
A)The harder they worked, the more they profited.
B)The more they invested, the less risky was their business.
C)The more they produced, the less they profited.
D)The less they borrowed, the higher was their yield.

Question

Quizplus · Accepted Answer

Economies of scale refer to the cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale. For individual farmers in the late nineteenth century, the significance of economies of scale often meant that as they increased production, market prices could fall due to oversupply, leading to lower profits per unit. This situation was exacerbated by the fact that many farmers were producing similar crops, and without the ability to scale up efficiently or diversify, increased production could indeed lead to less profit, not more.

Which of the Following Best Assesses the Significance of Economies