Question

Which is not a pecuniary economy of scale?


buying inputs in bulk


using machines to do tasks efficiently


borrowing at lower interest rates


discounts from large-scale marketing

Answer 1

Answer: Option using machines to do tasks efficiently

Explanation:

Pecuniary economy means a situation at when low cost is incurred in using factors of production. This type of economies can be achieved by the firms when they adopt bulk buying of the inputs. They allocate the finance efficiently by borrowing at a lower interest rate.

The advertising cost is also reduced by using mass marketing techniques. It will reach larger audience group at lesser prices. Here all the factors of production are used in ample quantities but obtained at discounted price.