O-LevelEconomicsMicroeconomic decision makers2281/11 · Oct/Nov 2010 · Q401 Mark

Firms often advertise saying that they specialise in providing a certain product or service. What is an advantage of such specialisation to the firm?

AIts workers are motivated by more varied tasks.

BProduction is dependent on other firms supplying components.

CThe firm's average cost of production is likely to fall.

DThe firm can quickly adapt production if their product or service is no longer required.

✓ Correct answer

C: The firm's average cost of production is likely to fall.

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Topic: Microeconomic decision makers, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, Oct/Nov 2010 Paper 1 Variant 1, question 40.

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