When a Single Firm Can Supply a Good or Service

question 56

Short Answer

When a single firm can supply a good or service to an entire market at a lower cost than could two or more firms, the industry is known as a

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Definitions:

Support Department Costs

Costs associated with the functions that assist the operational activities of a company, including HR, IT, and maintenance services, indispensable for production but not part of the direct manufacturing process.

Sequential Method

A process approach where tasks or operations are performed one after another in a specific order.

ABC

Activity-Based Costing, a method of assigning overhead and indirect costs to specific products or activities based on their use of resources.

Step-Down Method

A method of allocating support department costs to production departments that considers some inter-support-department services in a sequential or step-down fashion. Also known as the sequential method.