Related to the Economics in Practice on page 193. The search engine business is subject to ________, which means that as the use of the search engine increases, the long-run cost to provide additional searches on that search engine will likely fall.
A) diminishing returns
B) economies of scale
C) diseconomies of scale
D) significant government regulation

Question

Quizplus · Accepted Answer

Economies of scale refer to the phenomenon where as the scale of production increases, the cost per unit of output decreases. In the case of search engines, as more searches are conducted, the cost of providing additional searches will likely decrease due to the ability to spread fixed costs over a larger number of searches. Thus, the search engine business is subject to economies of scale.

Related to the Economics in Practice on Page 193