Exhibit 14-1

question 61

Multiple Choice

Exhibit 14-1
-Which of the following is indicated in Exhibit 14-1?

• A) Rubber is cheaper to produce than tires.
• B) The total cost of producing 100,000 tires is greater than the total cost of producing 200,000 tires.
• C) The minimum efficient scale of producing rubber is 4 million pounds.
• D) The minimum efficient scale of producing tires is greater than 200,000 tires.
• E) The marginal cost of the 200,000th tire must exceed the average cost of 200,000 tires.

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Definitions:

Limited Partners

Investors in a partnership who have limited liability to the extent of their investment in the company and do not participate in day-to-day management.

Partnership Business

A business organization in which two or more individuals manage and operate the business in accordance with the terms and objectives set out in a Partnership Agreement.

Access

The ability or right to approach, enter, or use something.

Limited Liability

A legal structure where a company's owners are protected from personal responsibility for its debts or liabilities.