Question

Which of the following is not a reason for the existence of economies of large scale production?

• A. bulk buying
• B. small markets
• C. specialized workers
• D. costs not increasing in proportion to volume or output

Answer 1

Answer: (B)

small markets

Economies of scale is when the long run average costs reduce over a period of large scale production. It is very difficult to achieve that in small markets as the demand for the products will be low to achieve economies of scale.