O-LevelEconomicsMicroeconomic decision makers2281/11 · May/June 2016 · Q141 Mark

The table shows the units of factors of production that a firm needs to employ for two different levels of output. [Table 14.1] What is the firm experiencing?

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Aconstant returns to scale

Bdiseconomies of scale

Cexternal diseconomies of scale

Dexternal economies of scale

✓ Correct answer

B: diseconomies of scale

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Topic: Microeconomic decision makers, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2016 Paper 1 Variant 1, question 14.

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