Lesson 3.3.3

3.3.3 Economies and diseconomies of scale Quiz: Pearson Edexcel Economics, Unit 3

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

In partnership with Revision Ninja

Lesson 3.3.3, Economies and diseconomies of scale: 20 multiple choice questions for the Pearson Edexcel Economics (9EC0), Unit 3: Theme 3: Business behaviour and the labour market, written with Revision Ninja.

Host it live on the board and students join with a game code on their own devices, or revise alone with Free Play. The answers are revealed in the game.

Host this setFree Play

The 20 questions

  1. What name is given to cost savings arising within an expanding firm?

    • Internal diseconomies
    • Internal economies
    • External economies
    • External diseconomies

  2. What are cost reductions enjoyed by all firms in a growing industry called?

    • External economies
    • External diseconomies
    • Internal diseconomies
    • Internal economies

  3. Purchasing economies of scale are achieved through which activity?

    • Cheaper borrowing
    • Specialised labour
    • Bulk buying
    • Mass advertising

  4. What happens to long-run average costs during diseconomies of scale?

    • They remain constant
    • They rise
    • They fall
    • They fluctuate

  5. What is the lowest level of output at which long-run average costs are minimised?

    • Allocative efficiency
    • Maximum capacity
    • Minimum efficient scale
    • Diminishing returns

  6. Which of the following is an internal economy of scale?

    • Industry research
    • Shared infrastructure
    • Technical economies
    • Local skilled labour

  7. Which of the following is an external economy of scale?

    • Risk-bearing economies
    • Local supplier network
    • Financial economies
    • Managerial economies

  8. Lower interest rates charged to larger firms illustrate which type of economy of scale?

    • Financial
    • Marketing
    • Managerial
    • Technical

  9. What cause of diseconomies of scale occurs when communication breaks down in large firms?

    • Poor coordination
    • Bulk buying
    • Specialised labour
    • Lower interest rates

  10. If doubling all inputs causes output to more than double, what is this called?

    • Increasing returns
    • Constant returns
    • Decreasing returns
    • Diminishing returns

  11. What market structure is most likely if minimum efficient scale is very high relative to demand?

    • Monopolistic competition
    • Monopoly
    • Perfect competition
    • Monopsony

  12. Spreading risks across multiple product markets is an example of which economy of scale?

    • Risk-bearing
    • Technical
    • Managerial
    • Purchasing

  13. Spreading fixed advertising costs over a larger volume of output is an example of which economy?

    • External economy
    • Financial economy
    • Technical economy
    • Marketing economy

  14. What action allows a large firm to achieve risk-bearing economies of scale?

    • Bulk purchasing
    • Hiring specialists
    • Product diversification
    • Cheaper borrowing

  15. A firm has total cost TC = 1,000 + 5Q. What is average total cost at Q = 100?

    • £5
    • £10
    • £15
    • £150

  16. What is occurring when long-run average cost falls as output increases?

    • X-inefficiency
    • Diseconomies of scale
    • Diminishing returns
    • Economies of scale

  17. What happens to average costs if a firm expands beyond its minimum efficient scale?

    • Costs equal zero
    • Costs fall continuously
    • Revenue doubles
    • Costs increase

  18. Minimum efficient scale is 20,000 units and market demand is 60,000 units. How many firms could operate at MES?

    • Six firms
    • Sixty firms
    • One firm
    • Three firms

  19. Why might a small firm be unable to benefit from advanced machinery?

    • Low tax rates
    • High interest rates
    • Excess market demand
    • Capital indivisibility

  20. Under what condition might lower average costs from economies of scale fail to lower consumer prices?

    • High monopoly power
    • Low barriers
    • Perfect competition
    • Elastic demand

All Pearson Edexcel Economics quizzes