Economies of Scale

question 39

Multiple Choice

Economies of scale

• A)Exist in both the short run and the long run.
• B)Explain why average variable and average total costs decline in the short run.
• C)Explain why average total costs decline as output increases in the long run.
• D)Explain why average total costs increase as output increases in the long run.

Understand different conflict management styles and identify characteristics of each.

Identify common causes of conflict in organizations.

Recognize the expression and types of conflict (e.g., felt, perceived, manifest).

Understand the role of authoritative command in conflict resolution.

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Definitions:

Variable Overhead

Costs that fluctuate with the level of production output, such as utilities for a manufacturing plant, which increase as production increases.

Direct Materials

Raw materials that can be directly associated with the production of specific goods or services and are a major component of total manufacturing costs.

Direct Labor-Hours

A measure of the time workers spend directly manufacturing a product, used in calculating labor costs and efficiency.

Variable Overhead

Costs of indirect production activities that fluctuate with the level of production output, such as electricity for machinery or materials handling costs.