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Watermelon scale economies (Optional)
» Watermelon scale economies (Optional) - Practice Questions
Watermelon scale economies (Optional) - Practice Questions
1. As compared to a U.S. producer, a watermelon grower in San AugustÍn Oapan has lower fertilizer, land and labor costs. Despite this, watermelon prices are _______________ in San AugustÍn Oapan compared to the U.S.
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higher
lower
about the same
The U.S. produces a large number of melons, making the average cost of producing a watermelon lower than if only a few melons were produced. This concept, where increased production means lower average cost, is more commonly known as:
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economies of scope
economies of scale
the law of large numbers
