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Question
Give two examples of internal economies.
Short Answer
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Solution
Two examples of internal economies:
- Bulk Buying (Purchasing Economy): A large firm can buy raw materials in bulk at discounted rates, reducing cost per unit.
- Specialized Machinery: As a firm grows, it can afford better, more efficient machines that lower production costs.
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Chapter 8: Cost and Revenue Analysis - TEST YOURSELF QUESTIONS [Page 161]
