Which of the following is not a source of economies of scale?

Question

BlackTom AI · Accepted Answer

Economies of scale arise when average cost per unit falls as a firm increases output; sources are factors that lower average costs with larger scale.

1. Relevant knowledge points and concepts
- Economies of scale: reductions in average cost due to larger production scale. They can be internal (within the firm) or external (industry-wide).
- Common internal sources: purchasing (bulk discounts), specialization of labor (division of tasks increases productivity), and the ability to use more efficient or specialized technology (capital equipment with lower average cost when spread over more units).
- Law of diminishing returns: in the short run, adding more of a variable input to fixed inputs eventually yields smaller additional output per extra unit of input; this increases marginal cost and can raise average costs (a cause of diseconomies, not economies).

2. Step-by-step reasoning
- Option a: Purchasing economies — buying inputs in bulk typically lowers unit input cost as quantity bought increases, so average production cost falls. This is a textbook source of economies of scale. (Valid)
- Option b: Ability to use improved technology — larger firms can afford specialized capital and automated processes that reduce per-unit costs when output is high. This is a source of economies of scale. (Valid)
- Option d: Specialisation of the workforce — dividing production into narrow tasks raises worker skill and speed, lowering average labor cost per unit as output rises. This is a classic internal economy of scale. (Valid)
- Option c: Diminishing returns — describes increasing marginal cost as additional variable inputs are added to fixed inputs; it leads to higher average costs beyond a point and is thus not a source of falling average costs.

3. Intermediate steps / illustration
- If adding inputs yields smaller marginal output, marginal cost rises; rising marginal-cost curves push up average cost, the opposite of what economies of scale require.

4. Why the correct answer is correct
- Diminishing returns produce increasing costs per unit as scale increases (in the SR with fixed inputs), so it cannot be a source of economies of scale.

5. Why other options are incorrect (brief)
- a, b, d each describe mechanisms that lower average cost with increased scale (bulk purchasing, better technology, worker specialisation), so they are genuine sources.

6. Conclusion
Therefore the correct answer is c. Diminishing returns, which matches the provided answer.

Which of the following is not a source of economies of scale?单项选择题

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