When It Is Cheaper for One Firm to Produce a Number

question 61

Multiple Choice

When it is cheaper for one firm to produce a number of different commodities together than it is for a group of small firms to produce those commodities, ____ exist(s) .

• A)economies of scale
• B)economies of scope
• C)diminishing marginal returns
• D)marginal cost pricing

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Definitions:

IFRS

International Financial Reporting Standards, a set of accounting guidelines providing a global framework for financial statements.

Deferral Method

An accounting procedure that postpones the recognition of certain income or expenses until a later accounting period.

Financial Statements

Reports that provide an overview of a company's financial condition, including income statement, balance sheet, statement of cash flows, and statement of changes in equity.

Capital Assets

Long-term assets that a business uses in its operations and that are not intended for resale, such as property, plant, and equipment.