Why Does Specialization Become More Profitable on a Larger Scale

Multiple Choice

Why does specialization become more profitable on a larger scale? I. Large firms are more profitable than small firms. II. Cost efficiencies become possible when the production scale is significantly large relative to the cost of the machines being used. III. Large-scale production justifies the acquisition of more knowledge on a specific activity.

A) I and II only
B) I, II, and III
C) I and III only
D) II and III only