O-LevelEconomicsMicroeconomic decision makers2281/13 · Oct/Nov 2025 · Q131 Mark

The size of the domestic car industry in Japan has enabled Japanese car producers to be more price competitive than rival car producers. What is an explanation for this?

AEconomies of scale are present in the Japanese car industry.

BManagerial problems exist in the Japanese car industry.

CProductivity is low in Japan.

DThe Japanese car industry is very labour-intensive.

✓ Correct answer

A: Economies of scale are present in the Japanese car industry.

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Topic: Microeconomic decision makers, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, Oct/Nov 2025 Paper 1 Variant 3, question 13.

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