Operations Can Be Classified According to the Degree of Variation

question 24

Multiple Choice

Operations can be classified according to the degree of variation in demand and visibility of the operation as well as their volume and variety of production. Which of the following operations
Would be classified as high variation and high visibility?

• A) A carpenter
• B) A fast food restaurant
• C) A front office bank
• D) A family doctor

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Definitions:

Long-run Supply

The time period in economics during which all factors of production and costs are variable, allowing firms to adjust all inputs in response to market conditions.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing to produce and sell.

Decreasing-cost Industry

An industry where costs per unit decline as the industry's output increases due to economies of scale.

LRAC Curve

The Long-Run Average Cost (LRAC) Curve represents the minimum average cost at which any output level can be produced in the long run when all inputs are variable.