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Long-run - short answer

question

Question 1

Explain why all the firms in an industry within a single economy are not all the same size.

Question 2

Explain why firms are bigger in some industries than others.

Question 3

Explain how full exploitation of the benefits of economies of scale and the division of labour can result in a firm having to become international/multinational.

Question 4

An industry has 12 firms that operate within it. The market shares of the top 6 firms in 2002 are given below.

Firm A B C D E F
Market share (%) 24 21 16 12 8 6


Calculate the 3, 5 and 6 firm concentration ratios (the percentage market share accounted for by the top 3, top 5 and top 6 firms) for this industry.

Question 5

An industry has 24 firms that operate within it. The sales value of the top 6 firms in 2002 is given below.

Firm A B C D E F
Sales value ($m per year) 12.5 2.5 2.3 1.7 0.9 0.8


The industry is worth $24 million per year

Calculate the 3, 5 and 6 firm concentration ratios for this industry.

Question 6

Explain three economies and three diseconomies of scale that may affect a firm.

Question 7

Explain the term 'capital intensive' firm.

Question 8

Why do capital-intensive firms tend to be large in relation to the size of the market they are in?

Question 9

Explain the term 'minimum efficient scale of production'.