In Exhibit 14­1, Suppose Each Tire Produced Requires Ten Pounds

question 65

Multiple Choice

In Exhibit 14­1, suppose each tire produced requires ten pounds of rubber.Which of the following is true?

• A)The tire manufacturer should integrate backward into producing rubber.
• B)The tire manufacturer should produce more than 200,000 tires.
• C)The tire manufacturer should buy rubber rather than produce it.
• D)The rubber producer must be a monopolist.
• E)The minimum efficient scale of rubber production is 2 million pounds.

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Definitions:

Bilateral Tolerance

A type of tolerance that allows a dimension to vary equally in both positive and negative directions from the nominal value.

Plus

A mathematical symbol (+) used to indicate addition or a positive value.

Minus

In engineering and mathematics, "minus" indicates a subtraction operation or a negative value in measurements and tolerances.

Abbreviation

The act of shortening something by omitting letters or using initials.