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Which of the Following Statements About an Increasing-Returns-To-Scale Industry Is

Question 25

Multiple Choice

Which of the following statements about an increasing-returns-to-scale industry is not true?


A) It will tend to concentrate production in the hands of a very few large firms.
B) Firms in the industry face higher costs per unit of production as their level of output increases.
C) Opportunity costs may fall with the level of output.
D) Proponents of strategic trade policy contend that tariffs can be used to stimulate production by a domestic industry capable of achieving increasing returns to scale.
E) The costs of producing a unit of output fall as more output is produced.

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