Economics 0455 · IGCSE · Firms’ costs, revenue and objectives

Firms’ costs, revenue and objectives — practice question

The large quantity of goods sold by big supermarkets allows them to lower prices, but the main advantage these businesses possess is that they are able to sell non-food items alongside food. Which economic results does the statement indicate are available to large supermarkets?

  • Aeconomies of scale and diversification
  • Bexternal benefits and specialisation
  • Chorizontal integration and optimum output
  • Dincreased sales and diminishing returns

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