A Decision Whether to Continue to Make a Product or Buy

question 173

True/False

A decision whether to continue to make a product or buy it externally depends on the external price and the amount of variable and fixed costs that can be eliminated assuming no alternative uses of resources.

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Definitions:

Tax Loss

Tax loss refers to a situation where business expenses exceed its incomes, which can be used to offset other taxable income.

Economies of Scale

Cost advantages a business obtains due to expansion, characteristically causing a decrease in fixed costs per unit of production.

Conglomerate Mergers

Conglomerate mergers involve companies from unrelated business activities or industries merging, often to diversify business operations and risk.

Market Share

The portion of a market controlled by a particular company or product.