Related to the Economics in Practice on page 193. The search engine business, which includes companies like Google and Bing, is subject to economies of scale. This means that as the use of a search engine such as Google ________, the long-run cost to provide additional searches on this engine will likely ________.
A) increases; rise
B) increases; fall
C) decreases; fall
D) increases or decreases; stay the same

Question

Quizplus · Accepted Answer

The concept of economies of scale suggests that as the usage of a search engine like Google increases, the long-run cost of providing additional searches on the same engine will likely decrease due to the cost advantages that come with a larger scale of operation. Therefore, the correct choice is B, where the increased usage would result in a fall in the long-run cost to provide additional searches on this engine.

Related to the Economics in Practice on Page 193