O-LevelEconomicsMicroeconomic decision makers2281/12 · Oct/Nov 2022 · Q151 Mark

Which statement is correct when comparing small firms with large firms?

ASmall firms are more able to adapt to changes in market conditions.

BSmall firms are more able to reduce competition through barriers to entry.

CSmall firms benefit from lower cost per unit from economies of scale.

DSmall firms have higher total fixed costs and lower average fixed costs.

✓ Correct answer

A: Small firms are more able to adapt to changes in market conditions.

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Topic: Microeconomic decision makers, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, Oct/Nov 2022 Paper 1 Variant 2, question 15.

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