Large firms are able to lower their costs by taking advantage of ___________________.
Fill in the blank(s) with the appropriate word(s).
economies of scale
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Which of the following best explains why monopolistically competitive firms face a downward sloping demand curve while perfectly competitive firms do not?
A) Monopolistically competitive firms sell a differentiated good. B) Monopolistically competitive industries have only a few firms. C) Monopolistically competitive firms have barriers to entry. D) Only industries with free entry and exit have firms that face horizontal demand curves.
If a firm is operating in the range of economies of scale, and if it is currently at the minimum point of its short-run average total cost curve, explain what action it can take to reduce its costs, if it does not want to change the quantity of output that it is producing