Economics 9708 · AS & A Level · 7.7

7.7 — practice question

Which pairing of statements about small firms and large firms is most likely to be correct?

  • Alarge firms: face high barriers to exit; small firms: are more common in manufacturing than in services
  • Blarge firms: do not experience diseconomies of scale; small firms: are more numerous than large firms
  • Clarge firms: may arise from internal growth or mergers; small firms: can do well when each item produced is different
  • Dlarge firms: cannot earn supernormal profits; small firms: cannot have any monopoly power

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