Economies of Scale in Activities Such as R&D,new Product Development,advertising,and

Multiple Choice

Economies of scale in activities such as R&D,new product development,advertising,and government lobbying arise mainly because of:

A) Specialization-as these activities grow in scale,there are productivity gains from division of labor
B) Indivisibilities-these activities involve large fixed costs that can be spread over a larger volume of output
C) Technical input-output relationships-increases in output do not require proportionate increases in input
D) Increased bargaining power-large companies can negotiate lower input prices for these activities