Economics (AS & A Level) · May / June 2022 · Paper 33 · Question 8

Firms often remain small even when growth could result in technical economies of scale. What is not a likely reason for this?

1. ADemand for the product tends to change often and rapidly.
2. BIndividual entrepreneurs wish to keep a tight personal control over their own firm.
3. CThe entrepreneurs who establish the firms tend to be ambitious risk-takers.
4. DThe market in which they operate is very specialised in nature, often selling unique products.

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