The question was fairly popular. The candidates were required to state the law of diminishing returns, define marginal and average products and then explain any three factors that determine the size of firms.
The candidates performed quite well on the 'a' and ‘b' parts of the question but scored below average marks in the 'c' part.
Factors expected to have been stated by the candidates include the following
The nature of the product of the firm
Size of the market
The amount of capital avialable to a firm
Opportunities avialable for growth e.g technology, government policies
The objective and capability of the firm owner
Availability of inputs
Bussiness uncertainty – Some businesses remain small because they do not want to take risks.
