List how economies of scale contribute to a firm.
What will be an ideal response?
Economies of scale allow firms to:
Spread their fixed costs over a larger output.
Employ specialized systems and equipment.
Take advantage of certain physical properties. One such property is known as the cube-square rule: The volume of a body such as a pipe or a tank increases disproportionately more than its surface. This same principle makes big-box retail stores such as Walmart or The Home Depot cheaper to build and run. They can also stock much more merchandise and handle inventory more efficiently. Their huge size makes it difficult for department stores or small retailers to compete on cost and selection.
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Pointing instead of telling a person how to find something is an example of which function?
a. conflicting b. substituting c. emphasizing d. repeating
Under the modified cash basis of accounting, no entry is made when
a. property is purchased on credit; b. cash is received; c. depreciation is recognized; d. a utility bill is received; e. every one of these requires an entry
The legal doctrine of strict product liability is controversial because it unfairly holds a business accountable for paying damages in cases where it was not at fault.
Answer the following statement true (T) or false (F)
In general, how many suppliers should constitute a firm’s supplier base?
a. Many b. Few c. Very many d. Ten