Background: A firm with high fixed costs requires a large number of customers in order to have a meaningful return on investment. This is where economies of scale become important. Since each firm has large initial costs, as the firm gains market share and increases its output the fixed cost (what they initially invested) is divided among a larger number of customers. Therefore, in industries with large initial investment requirements, average total cost declines as output increases over a much larger range of output levels.

Situation: City D's mayor wants to invite more businesses in the city. Three firms, firm A, firm B, and firm C, took advantage of this opportunity. Firm A does not require large initial costs, but firm B and firm C require 
large initial costs. Firm B managed to increase its market share, but firm C failed to increase its market share.

Question: Which firm would not have meaningful return on investment if they don't get large number of customers, firm A or firm B?
Answer: firm B

Situation: City D's mayor wants to invite more businesses in the city. Three firms, firm A, firm B, and firm C, took advantage of this opportunity. Firm A does not require large initial costs, but firm B and firm C require 
large initial costs. Firm B managed to increase its market share, but firm C failed to increase its market share.

Question: Which firm would most likely have meaningful return on investment even if they don't get large number of customers, firm A or firm B?
Answer: firm A

Situation: City D's mayor wants to invite more businesses in the city. Three firms, firm A, firm B, and firm C, took advantage of this opportunity. Firm A does not require large initial costs, but firm B and firm C require 
large initial costs. Firm B managed to increase its market share, but firm C failed to increase its market share.

Question: Would firm A most likely fail or succeed in achieving a meaningful return on investment if they don't get a large number of customers?
Answer: succeed

Situation: City D's mayor wants to invite more businesses in the city. Three firms, firm A, firm B, and firm C, took advantage of this opportunity. Firm A does not require large initial costs, but firm B and firm C require 
large initial costs. Firm B managed to increase its market share, but firm C failed to increase its market share.

Question: Would firm B most likely fail or succeed  in achieving a meaningful return on investment if they don't get a large number of customers?
Answer: fail

Situation: City D's mayor wants to invite more businesses in the city. Three firms, firm A, firm B, and firm C, took advantage of this opportunity. Firm A does not require large initial costs, but firm B and firm C require 
large initial costs. Firm B managed to increase its market share, but firm C failed to increase its market share.

Question: Which firm would most likely enjoy economies of scale, firm A or firm B?
Answer: firm B

Situation: City D's mayor wants to invite more businesses in the city. Three firms, firm A, firm B, and firm C, took advantage of this opportunity. Firm A does not require large initial costs, but firm B and firm C require 
large initial costs. Firm B managed to increase its market share, but firm C failed to increase its market share.

Question: Which firm would most likely not be able to achieve economies of scale, firm A or firm B?
Answer: firm A

Situation: City D's mayor wants to invite more businesses in the city. Three firms, firm A, firm B, and firm C, took advantage of this opportunity. Firm A does not require large initial costs, but firm B and firm C require 
large initial costs. Firm B managed to increase its market share, but firm C failed to increase its market share.

Question: Which frim's average total cost would decline, firm B or firm C?
Answer: firm B

Situation: City D's mayor wants to invite more businesses in the city. Three firms, firm A, firm B, and firm C, took advantage of this opportunity. Firm A does not require large initial costs, but firm B and firm C require 
large initial costs. Firm B managed to increase its market share, but firm C failed to increase its market share.

Question: Which frim's average total cost would not decline, firm B or firm C?
Answer: firm C

Situation: City D's mayor wants to invite more businesses in the city. Three firms, firm A, firm B, and firm C, took advantage of this opportunity. Firm A does not require large initial costs, but firm B and firm C require 
large initial costs. Firm B managed to increase its market share, but firm C failed to increase its market share.

Question: Would firm B's average total cost decline or not decline?
Answer: decline

Situation: City D's mayor wants to invite more businesses in the city. Three firms, firm A, firm B, and firm C, took advantage of this opportunity. Firm A does not require large initial costs, but firm B and firm C require 
large initial costs. Firm B managed to increase its market share, but firm C failed to increase its market share.

Question: Would firm C's average total cost decline or not decline?
Answer: not decline