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Business economics

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Question 7

The acquisition of regional pharmacy chain CarePharm by MediHealth is expected to yield substantial scale economies. Figure 1 shows a typical long-run average cost (LRAC) curve illustrating economies and diseconomies of scale.

A diagram of an economies of scale graph. The vertical y-axis is marked with label A. The horizontal x-axis is marked with label B. There is a U-shaped curve that slopes downwards to a minimum point and then slopes upwards; this curve is marked with label C. All other text on the axes is blank.

Fill in the missing labels, A, B and C on the diagram from the list below. Each option may only be used once.

List of options:

  • Output
  • Total Revenue
  • Average Costs
  • Long-run average cost curve
  • Marginal Cost
  • Taxation
[3]

Business economics Questions

  1. IGCSE
  2. /Economics
  3. /Business economics