Larger Firms Will Often Have Lower Minimum Per-Unit Costs Than

question 108

Multiple Choice

Larger firms will often have lower minimum per-unit costs than smaller firms because

• A) employee shirking is less of a problem.
• B) large-scale output allows greater specialization for both labor and machines in the production process.
• C) mass production techniques, with high setup and development costs, are appropriate only when a small output is planned.
• D) all of the above are correct.

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Definitions:

Company

An organized entity engaged in commercial, industrial, or professional activities, incorporated or unincorporated.

Dividend Yield Ratio

A financial ratio that measures how much a company pays out in dividends each year relative to its stock price.

Net Operating Income

A financial metric that denotes a company’s income after subtracting operating expenses but before interest and taxes.

Total Common Stock

The aggregate value or amount of all shares of common stock issued by a company.