Question

Fill in the blank with the most suitable option:
The primary purpose of the passage is to __________________.

• A. Point out the importance of intangible capital for realizing economies of scale in manufacturing
• B. Show that manufacturers frequently gain a competitive advantage from investment in large manufacturing facilities
• C. Argue that large manufacturing facilities often fail because of inadequate investment in both tangible and intangible capital
• D. Suggest that most new industries are likely to be dominated by firms that build large manufacturing plants early
• E. Explain why large manufacturing plants usually do not help manufacturers achieve economies of scale

Answer 1

Answer: (A)

Sentences like "Consequently, potential economies of scale are based on the physical and engineering characteristics of the production facilities- that is, on tangible capital-but realized economies of scale are operational and organizational, and depend on knowledge, skills, experience, and teamwork- that is, on organized human capabilities, or intangible capital.", of the first paragraph and "The importance of investing in intangible capital becomes obvious when one looks at what happens in new capital-intensive manufacturing industries." of the second paragraph support option A as the correct answer. Statements through out the passage point out the fact that the primary purpose of the passage is to point out the importance of intangible capital for realizing economies of scale in manufacturing. Thus, option A befits the context better than the other options.