Suppose Firm X Implements a New Method for Extracting Copper

question 205

Multiple Choice

Suppose firm X implements a new method for extracting copper from copper-bearing ore. This is an example of

• A) product innovation.
• B) process innovation.
• C) economics of scale.
• D) the inverted-U theory.

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Definitions:

Capital Intensity Ratio

A measure of how much capital is used in the production process, calculated as the ratio of total assets to sales.

Accounts Receivable

The financial obligations customers hold towards a company for products or services that have been served or benefited from, yet are unpaid.

Full Capacity

The maximum level of output that a company can sustain over a long period without increasing maintenance costs or causing wear and tear on its production assets.

Fixed Assets

Long-term tangible assets held for business use and not expected to be converted to cash in the upcoming fiscal year, such as buildings, machinery, and equipment.