Boeing aircraft company was able to over its production costs of the first - jumbo jetll in the seventies because Boeing could market it to several foreign airlines in addition to domestic airlines. This illustrates ?
Correct answer: A. How economies of scale make possible a larger variety of products in international trade
- A. How economies of scale make possible a larger variety of products in international trade
- B. A transfer of wealth from domestic consumer to domestic producer as the result of trade
- C. How a natural monopoly is forced to behave more competitively with international trade
- D. How a natural monopoly is forced to behave less competitively with international trade
Explanation
Selling aircraft to both domestic and foreign airlines expands the market over which Boeing can spread its large fixed production costs. This is an example of economies of scale supporting a greater variety of products in international trade.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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