If the Minimum Efficient Scale in Aluminum Production Exceeds the Quantity

question 32

Multiple Choice

If the minimum efficient scale in aluminum production exceeds the quantity of aluminum any individual aluminum siding producer buys,

• A)siding producers should integrate backward into aluminum production
• B)there will be a monopoly in aluminum production
• C)siding producers should not integrate backward into aluminum production
• D)siding producers will be charged prices above what the cost of producing aluminum themselves would be
• E)siding companies will switch to vinyl

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Definitions:

Net Profit

The amount of profit left over after all expenses and taxes have been subtracted from total revenue.

Pretax Profit

The earnings a company generates before taxes are deducted.

Common Stock

A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's profits or losses.

Dividend Payments

Cash payments made by a company to its shareholders, usually derived from the company's profits.