With Accumulated Production Experience and a Higher Volume of Production

question 8

Multiple Choice

With accumulated production experience and a higher volume of production, companies not only become more efficient but also ________.

• A) gain economies of scale
• B) incur higher overhead costs
• C) create derived demand in the market
• D) spend more per unit of produced output
• E) tend to routinely spend less on inputs

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Definitions:

Asset Revaluation

The process of adjusting the book value of a company's assets to reflect their current fair market values.

Dividends

Payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders.

Surplus

The amount by which revenue exceeds expenses in a given period, indicating a positive financial state.

Share Option

A right granted by a company to its employees or executives to purchase shares in the company at a preset price, often used as part of compensation packages.