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If a firm in a perfectly competitive industry takes advantage of economies of scale and...

If a firm in a perfectly competitive industry takes advantage of economies of scale and expands its production facilities, then
Select one:
a. its cost curves will shift down, enabling it to earn a greater profit, at least for a little while.
b. other firms will be forced to do the same to survive.
c. the market price is decreased because of greater output finding its way to the market.
d. all of the above.
e. we must be in the long run because plant size is not fixed.?

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Answers (2)

isaaq
2 weeks ago
Answer
d. all of the above.



Economies of Scale refer to the cost advantage experienced by a firm when it increases its level of output. The advantage arises due to the inverse relationship between per-unit fixed cost and the quantity produced. The greater the quantity of output produced, the lower the per-unit fixed cost
Gaby
2 weeks ago
Economies of Scale refer to the cost
advantage experienced by a firm when it
increases its level of output. The advantage
arises due to the inverse relationship
between per-unit fixed cost and the
quantity produced. The greater the quantity
of output produced, the lower the per-
unit fixed cost. Economies of scale also
result in a fall in average variable costs
(average non-fixed costs) with an increase
in output. This is brought about by
operational efficiencies and synergies as a
result of an increase in the scale of
production.
Economies of scale can be implemented by a
firm at any stage of the production process.
In this case, production here refers to the
economic concept of production and
involves all activities related to the
commodity not involving the final buyer.
Thus, a business can decide to implement
economies of scale in its marketing division
by hiring a large number of marketing
professionals. A business can also adopt the
same in its input sourcing division by
moving from human labor to machine labor.
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