The Existence of External Economies of Scale

question 7

Multiple Choice

The existence of external economies of scale

• A)cannot be associated with a perfectly competitive industry.
• B)tends to result in one huge monopoly.
• C)focuses more on individual firms than the industry as a whole.
• D)may be associated with a perfectly competitive industry.
• E)tends to result in large profits for each firm.

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Definitions:

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, often used to assess liquidity and manage cash flow.

Fixed Asset Turnover Ratio

A financial metric that measures how efficiently a company is using its fixed assets to generate sales.

Overall Management

Overall management involves the comprehensive coordination and administration of all aspects of an organization or project, including strategy, operations, finance, and human resources, to achieve its objectives.

Financial Records

Financial records are written accounts of a business's financial activity, including transactions, income, and expenses, essential for tracking financial performance.