passwella.
Menu

WAEC Economics 1988 Question 28

Question 28

Theory of Production

A condition which adversely affects expansion of production is

  1. A.effective management
  2. B.limited size of the market
  3. C.availability of funds
  4. D.increased profit prospects
  5. E.increasing returns to scale.
Show the answer and explanation

Answer: B (limited size of the market)

Explanation

If the market is small, extra output cannot be sold, so a firm has no reason to expand.