Costs and economies of scale (OCR A-Level Economics): Quizzes
📚Quizzes
Practise the questions
13 questions from this quiz
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Practise the questions
13 questions from this quiz
Which costs do not change with the level of output produced?
Which costs do not change with the level of output produced?
Fixed costs
What are marginal costs?
What are marginal costs?
Additional cost of one more unit
What defines the short run in production?
What defines the short run in production?
At least one factor is fixed
In the long run, which factors of production can be adjusted?
In the long run, which factors of production can be adjusted?
All factors
What does the law of diminishing returns state?
What does the law of diminishing returns state?
Marginal product eventually decreases
What happens to the marginal product curve under diminishing returns?
What happens to the marginal product curve under diminishing returns?
Rises, peaks, then declines
Which is an example of technical economies of scale?
Which is an example of technical economies of scale?
Using advanced machinery
What financial advantage do larger firms often have?
What financial advantage do larger firms often have?
Access to cheaper finance
Who benefits from external economies of scale?
Who benefits from external economies of scale?
All firms in an industry
How does industry growth create external economies through labour?
How does industry growth create external economies through labour?
More skilled labour pool forms
What causes diseconomies of scale?
What causes diseconomies of scale?
Management inefficiencies
Where is the minimum efficient scale on the LRAC curve?
Where is the minimum efficient scale on the LRAC curve?
At the lowest point
What happens to average costs to the left of MES?
What happens to average costs to the left of MES?
They decrease