Banking System and Capital Market Questions and Answers for Competitive Exams

Q.

If an industry is characterised by economies of scale then

[A] Long run unit cost of production decreases as the quantity the firm produces increases
[B] Barriers to entry are not very large
[C] Capital requirement are small due to the efficiency of the large scale operation
[D] The costs of entry into the market are likely to be substantial

Answer & Explanation

Answer: Option [A]

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