Economics 9708 · AS & A Level · 7.7

7.7 — practice question

Within many developed economies, garments are designed by small firms and sold at retail by large firms. What is the most likely reason for this pattern?

  • Adesign firms need to be flexible to cope with frequent fashion changes; retail firms need to exploit marketing economies of scale
  • Bdesign firms need to employ highly specialised and skilled workers; retail firms need to operate at a low minimum efficient scale
  • Cdesign firms need to operate at a high minimum efficient scale; retail firms need to offer a wide range of products to survive
  • Ddesign firms need to overcome high barriers to entry into the industry; retail firms need to take advantage of technical economies of scale

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