Which of the Following Strategies Can fiRms Undertake to Increase

question 62

Multiple Choice

Which of the following strategies can firms undertake to increase the minimum efficient scale in an industry?

• A) Reduce the quantity of raw material used to produce each additional unit.
• B) Make large investments in intangible assets such as brand names.
• C) Invest in cost-reducing technologies used in production.
• D) Reduce the level of sunk costs by reducing the plant size.

Understand the conditions under which variables in a multiple regression should be related or independent.

Understand the basic concepts of linear regression.

Differentiate between simple linear regression and multiple regression.

Grasp the significance and calculation of the correlation coefficient in predicting relationships.

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Definitions:

Increasing-Cost Industry

An industry in which the costs of production increase as the industry grows and decreases as it contracts.

Resource Prices

The costs associated with acquiring inputs used in the production process, such as labor, materials, and capital.

Industry Expands

The process of growth within a particular sector or industry, marked by increased production, innovation, and possibly the entrance of new firms.

Economic Profits

The difference between a firm's total revenues and its total costs, including both explicit and implicit costs, representing the excess return over the firm's opportunity costs.