One reason that a firm may experience increasing returns to scale is that greater levels of output make it possible for the firm to:

CA Foundation · Business Economics · MTP · January 2025
One reason that a firm may experience increasing returns to scale is that greater levels of output make it possible for the firm to:
(A) A. employ more specialized machinery.
(B) B. obtain bulk purchase discounts.
(C) C. employ a greater division of labour.
(D) D. All of the above are correct.

Suggested Answer and Working Notes:

Correct Answer: Option (D)

D. All of the above are correct.

Topics: Theory of Production and Cost

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