Economies of Scale Exist When the ________ a Unit of a Good

question 284

Multiple Choice

Economies of scale exist when the ________ a unit of a good ________.

• A) average cost of producing; falls as its output rate increases
• B) price; falls as its input rate decreases
• C) price; rises as its output rate increases
• D) average cost of producing; rises as its input rate increases

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Definitions:

Variable Operating

Expenses associated with the operation of a business that vary with the level of production or sales, such as raw materials and direct labor costs.

Merchandise Inventory

The total of all goods held by a company that are ready for sale, typically used in retail and wholesale operations.

Direct Labour Budget

A direct labour budget estimates the total labor cost and number of labor hours required for production in a given period, based on forecasted sales and production levels.

Materials Purchases

involves the acquisition of raw materials required for the production process, an essential part of managing manufacturing inputs.