Match the items of List - II with the items of List - I and indicate the code of correct matching. The…
Economies of scale (a) mean lowering production costs by producing in bulk (ii); Internal economies (b) arise when cost per unit depends on the size of the individual firm…
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Match the items of List - II with the items of List - I and indicate the code of correct matching. The items relate to economies of scale/scope.
| List-I | List-II |
|---|---|
| (a) Economies of scale | (i) arise with lower average costs of manufacturing a product when two complementary products are produced by a single firm |
| (b) Internal economies | (ii) Mean lowering of costs of production by producing in bulk |
| (c) External economies | (iii) Arise when cost per unit depends on size of the firm |
| (d) Economies of scope | (iv) Arise when cost per unit depends on the size of the industry, not the firm |
Answer and explanation
Correct answer C
Economies of scale (a) mean lowering production costs by producing in bulk (ii); Internal economies (b) arise when cost per unit depends on the size of the individual firm (iii); External economies (c) arise when cost per unit depends on the size of the industry rather than the firm (iv); and Economies of scope (d) arise when a single firm achieves lower average costs by jointly producing complementary products (i).
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UGC NET Commerce