Which of the following statements about types of economies is true?
A) An organization's small size often creates scale economies and economies of scope.
B) An organization's small size often creates scale economies but not economies of scope.
C) An organization's large size often creates scale economies and economies of scope.
D) An organization's large size often creates scale economies but not economies of scope.
E) An organization's large size often creates economies of scope but not scale economies.
C) An organization's large size often creates scale economies and economies of scope.
Explanation: Size creates scale economies—that is, lower costs per unit of production. Size can offer specific advantages such as lower operating costs, greater purchasing power, and easier access to capital. Size also creates economies of scope; materials and processes employed in one product can be used to make related products.
You might also like to view...
Suppose a riskless project requires an initial investment of $10 and will generate a one-time cash inflow of $30 two years later. Assuming a risk-free interest rate of 5%, which of the following statements about the project is NOT true?
a. The net present value of the project is positive. b. The IRR is greater than 50 percent. c. The accounting rate of return on the project is positive. d. The payback period is less than 2 years.
Accrued revenues at the end of one accounting period are expected to result in cash receipts in a future period.
Answer the following statement true (T) or false (F)
Which of the following accommodations might be necessary when you want to persuade people from different cultures?
A) Accommodating a different decision-making process B) Accommodating a different set of priorities C) Accommodating a different view of necessities D) Accommodating a different view of desires E) Accommodating a different view of price
Which of the following statements is true?
a. After you have identified the purpose of your message, the next step is to write the message. b. To write effectively, write a quick draft and then do the research and fill in details later. c. Use a variety of details to help organize your message. d. The major purpose of many business messages is to have the receiver understand a body of information and concentrate on the logical presentation of the content.