Of the Following,which Is NOT a Disadvantage of Making

question 1

Multiple Choice

Of the following,which is NOT a disadvantage of making?

• A) The firm has less control over quality.
• B) It requires the company to have expertise in the production of the component or raw materials what will be made.
• C) The people producing the component or raw material do not have the incentive to improve their product.
• D) The firm may not be able to gain the economies of scale that can be gained by a supplier that is able to pool the activity of a large number of firms.
• E) The firm would incur both fixed and variable costs.

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Definitions:

Goods and Services

The tangible and intangible outputs of an economy that satisfy consumer needs and wants.

Product Market

The marketplace where final goods or services are offered to consumers, businesses, and the public.

Factor Market

A marketplace for the services of a factor of production (e.g., labor, capital), where firms buy resources they need to produce goods and services.

Circular Flow

An economic model depicting how money moves through an economy between producers and consumers, illustrating the continuous flow of goods and services and financial transactions.