A car leasing company that expands its size by buying its competitors may run the risk of increasing production cost per unit due to:
A. diseconomies of scale.
B. economies of scale.
C. diminishing returns.
D. greater use of large-volume purchases.
Answer: A
You might also like to view...
Refer to Figure 4.1, which shows Molly's and Ryan's individual demand curves for compact discs per month. Assuming Molly and Ryan are the only consumers in the market, if the market quantity demanded is 15, the price must be
A) $0. B) $6. C) $9. D) $15.
The textbook rejects the cost-plus-markup theory of price setting because
A) business firms do not describe their price-setting procedures as cost-plus procedures. B) competitors and monopolists set prices in different ways. C) it cannot explain the prices we actually observe. D) it ignores the role of government in regulating prices. E) no single theory can explain all price-setting.
A firm that faces a downward sloping demand curve is known as a
A) price taker. B) utility maximizer. C) price searcher. D) perfect competitor.
The effects of airline deregulation in the early to mid-1980s included all of the following except the
a. dropping of unprofitable routes b. development of the hub-and-spoke system c. establishment of new commuter lines d. raising of airline fares e. bankruptcy of some airlines