Which of the following is an example of economies of scale?
A. To attract firms to locate in its state, the state government reduced the tax rate that businesses must pay on its profits, thus lowering the costs to firms who locate in the state.
B. As the computer industry has expanded, the number of professionally trained computer programmers has also increased, which has caused the salaries of computer programmers to increase.
C. A firm increases in size and is therefore able to lower its health insurance costs because as the size of the group insured increases, the premium per person decreases substantially.
D. As the demand for calculators increased, the price of calculators actually fell.
Answer: C
You might also like to view...
An increase in the equilibrium price and a decrease in the equilibrium quantity can be the result of
A) a decrease in demand. B) an increase in supply. C) a decrease in supply. D) an increase in demand. E) None of the above.
Government shares in the gains to risk-bearing activities but does not _____
a. share in the losses when depreciation is straight-line b. share in the losses when the investor has no other income c. share in the losses when depreciation is accelerated d. share in the losses when capital losses are allowed