Managers Should Not Become Complacent About Efficiency-Based Cost Advantages Because

question 1

Multiple Choice

Managers should not become complacent about efficiency-based cost advantages because:

• A) both learning effects and economics of scale go on forever.
• B) the experience curve will bottom out at some point.
• C) cost advantages gained from experience effects are not affected by the development of new technologies.
• D) unit costs keep reducing as output increases.
• E) the experience curve steadily rises after a certain threshold is reached, indicating an increase in unit costs.

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Definitions:

Required Rate Of Return

The lowest annual return percentage that persuades individuals or companies to commit capital to a particular project or security.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating its short-term liquidity.

Tax Rate

The share of profits or income that is levied as tax on a person or a corporation.

Minimum Bid

The lowest price that a seller is willing to accept for an item being sold at auction.