A Car Leasing Company That Expands Its Size by Buying

question 35

Multiple Choice

A car leasing company that expands its size by buying its competitors may run the risk of increasing production cost per unit due to:

• A) diseconomies of scale.
• B) economies of scale.
• C) diminishing returns.
• D) greater use of large-volume purchases.

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Definitions:

Secured

Refers to loans or debt that are backed by collateral, reducing the risk for lenders and often resulting in lower interest rates for borrowers.

Tax-Exempt

A status that allows an entity or income to be free from federal, state, or local tax under certain conditions.

Domestic Support Obligations

Financial obligations, such as alimony or child support, owed to a spouse, former spouse, or child, often as determined by a court order.

Homestead Exemptions

Legal provisions that protect a portion of a homeowner’s property from creditors and property taxes.