CAIE A-Level Economics 7.5.5 Economies of scale & average cost

CAIE A-Level Economics 7.5.5 Economies of scale & average cost
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise linking economies of scale to falling average costs and separating them from diseconomies or revenue changes.

How this is tested

  • distinguish economies of scale from diseconomies by the direction of average cost

Question 10

[Maximum number: 1]

What is true about economies of scale but not diseconomies of scale?

A

They occur because average revenue is increasing.

B

They occur because of management policy changes.

C

They occur in the short run.

D

They occur with decreasing average cost.