Question

Firms experience economies of scaleLOADING... for several reasons. What is one such​ reason? A firm might experience economies of scale because A. managers experience diminishing returns comma decreasing their marginal productivity as output expandsmanagers experience diminishing returns, decreasing their marginal productivity as output expands. B. as a firm expands comma it may have to borrow money at a higher interest rateas a firm expands, it may have to borrow money at a higher interest rate. C. managers begin to have difficulty coordinating the operation of the firm. D. a​ firm's technology may make it impossible to increase production without a larger proportional increase input usage. E. large firms may be able to purchase inputs at lower costs than smaller competitorslarge firms may be able to purchase inputs at lower costs than smaller competitors.

Answer 1

Answer:

E - large firms may be able to purchase inputs at lower costs than smaller competitors

Explanation:

Economies of Scale are the cost advantage that accrue to a firm due to the size of the firm's output.

A large firm buys in large quantities and can therefore enjoy discounts from suppliers because of the size of their purchase. This is an example of economies of scale.

This discount might not be available to smaller firms because their orders are smaller compared to that of larger firms and so do not qualify for the discount.