Larger output allows firms to invest in more specialized systems such as which of the following?

• A. Randomized production methods
• B. General-purpose tools
• C. Assembly lines
• D. Manual labor for all tasks

Answer: (C)

Verified step by step guidance

1. Understand the concept of economies of scale, which explains how larger output enables firms to invest in more specialized production methods that increase efficiency.
2. Recognize that specialized systems are designed to improve productivity by focusing on specific tasks rather than using general-purpose tools or random methods.
3. Identify that assembly lines are a classic example of specialized production systems that become feasible and cost-effective only when output is large enough to justify the investment.
4. Contrast assembly lines with other options: randomized production methods lack specialization, general-purpose tools are less efficient for large-scale production, and manual labor for all tasks is less specialized and less efficient.
5. Conclude that larger output allows firms to invest in assembly lines because these systems optimize production by breaking down tasks into specialized, repetitive steps, reducing costs and increasing output.