Economics (AS & A Level) · May / June 2025 · Paper 31 · Question 7

Which combination of statements about small firms and large firms is most likely to be correct?

1. Asmall firms: are more common in manufacturing than in services; large firms: face high barriers to exit
2. Bsmall firms: are more numerous than large firms; large firms: do not experience diseconomies of scale
3. Csmall firms: can do well when each item produced is different; large firms: may arise from internal growth or mergers
4. Dsmall firms: cannot have any monopoly power; large firms: cannot earn supernormal profits

As printed in the paper