Economics 9708 · AS & A Level · 7.7

7.7 — practice question

Which factor is most likely to account for the fact that both large and small firms are often present in the same industry?

  • AAll firms in the industry produce identical products.
  • BFirms that assemble the final product buy components from specialist firms within the industry.
  • CProduction within the industry is subject to diseconomies of scale.
  • DThere are significant barriers to the entry of new firms into the industry.

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