Economics 9708 · AS & A Level · 7.7

7.7 — practice question

What would account for a rise in the size of an industry and a decline in the average output of firms within that industry?

  • Aan advance in communication methods which reduce coordination problems within firms
  • Ban advance in technology which increases the cost advantage of capital-intensive methods of production
  • Can increase in barriers to entry into the industry combined with an increase in barriers to exit from the industry
  • Dan increase in external economies of scale combined with a decrease in internal economies of scale

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