An Economist Observed That, as More Computers Are Added to a Factory

question 82

Multiple Choice

An economist observed that, as more computers are added to a factory, the costs of production initially decline, reach a minimum, and then rise. In a diagram that has costs on the vertical axis and the number of computers on the horizontal axis, the relationship always is

• A) negative both before and after the minimum point.
• B) negative and then positive after the minimum point.
• C) negative and then linear after the minimum point.
• D) positive and then negative after the minimum point.
• E) linear and then positive after the minimum point.

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Definitions:

Intra-entity Gross Profit

Refers to the profit generated from transactions within the same company or group, not yet realized from an external party's perspective.

Consolidation Process

The method of combining the financial statements of two or more legally separate entities into one set of financial statements for the group as a whole.

Voting Common Stock

Refers to a class of shares that grants the holder the right to vote on company matters and board elections.

Consolidation Entry TI

Consolidation Entry TI (Transaction Information) involves the adjustments and eliminations made during the consolidation process to accurately reflect the group's financial position as if the entities operated as a single entity.