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Define economies of scale. Is there evidence of economies of scale in the airline industry? (Hint: Consider Low-Cost-Carriers). In large commercial aircraft manufacturing?

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Mahe Alam
Mahe AlamLv10
31 Mar 2021
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Related questions

Which of the following statements is true about economies of scale? Select one:

a. Economies of scale refer to cost savings that come from learning by doing.

b. Attaining economies of scale increases a firm's profitability.

c. Economies of scale lead to an increase in the average unit cost of a product.

d. Economies of scale result due to the increase in the perceived value of a product.

e. The ability to spread variable costs over a large volume is a source of economies of scale

As we have discussed, monopolies are illegal as they eliminate competition and distort an industry. Entry into a monopoly is almost impossible as the economies of scale are so strong. If there is evidence of a monopoly arising, the Department of Justice will intervene and eliminate it. However, oligopolies and cartels are in fact legal. But, why are the latter two not illegal as the economies of scale are just as strong?

18. "Industry concentration" A. means that there are a large number of small firms in the industry B. means that there are a small number of large firms in the industry C. leads to lower prices in the industry D. leads to economies of scale in production

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