Reasons for Making Component Parts Rather Than Buying Them Include

question 53

Multiple Choice

Reasons for making component parts rather than buying them include the following reasons except

• A) more complete utilization of plant capacity
• B) a secret design may be protected
• C) limit working capital requirements
• D) products may be of higher quality than those available from outside suppliers

---

Definitions:

Foreign Tariffs

Taxes imposed by a government on goods and services imported from other countries, often used to protect domestic industries.

Agricultural Commodities

Basic goods used in food production and obtained from farming activities, like grains, livestock, and dairy.

Marginal Utility

The extra utility a consumer obtains from the consumption of 1 additional unit of a good or service; equal to the change in total utility divided by the change in the quantity consumed.

Inelastic Nature

Characterizes a product or service whose demand or supply does not significantly change in response to price adjustments.