Economics 9708 · AS & A Level · 7.7

7.7 — practice question

Many firms continue to be small even though expansion could bring technical economies of scale. Which of these is not a likely explanation for that?

  • ADemand for the product tends to change often and rapidly.
  • BIndividual entrepreneurs wish to keep a tight personal control over their own firm.
  • CThe entrepreneurs who establish the firms tend to be ambitious risk-takers.
  • DThe market in which they operate is very specialised in nature, often selling unique products.

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