(a)[7]
- Explain the meaning of an economy of scale. [3]
- Explain how economies of scale are likely to change the price and output of a firm such as the supermarket. [4]
(b)[5]
The article says the supermarket helps the economy. Is this normally an aim of large businesses?
(c)[8]
The article says the supermarket ‘acts as a monopsonist’. Analyse what this means and decide whether the article can be used as evidence to support the opinion that a monopsony is beneficial.