O-LevelEconomicsMicroeconomic decision makers2281/12 · May/June 2025 · Q111 Mark

The diagram shows the average total cost curve (ATC) for a firm after a merger. [Figure 11.1] Why is the movement from X to Y likely to result from this merger?

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AConsumer demand is rising.

BMarketing economies of scale occur at higher levels of output.

CThe firm faces problems of co-ordination between departments.

DThe firm is negotiating discounts through bulk buying.

✓ Correct answer

C: The firm faces problems of co-ordination between departments.

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Topic: Microeconomic decision makers, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2025 Paper 1 Variant 2, question 11.

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