When a Firm Becomes So Large It Is Difficult to Coordinate

question 250

Multiple Choice

When a firm becomes so large it is difficult to coordinate and control,it is most likely that

• A) economies of scale have begun.
• B) diseconomies of scale have begun.
• C) average total cost begins to fall.
• D) long-run average costs become negative.
• E) there are increasing marginal returns to increasing the firm's plant size.

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Definitions:

Journalize

The process of recording financial transactions in a company's journal, marking the first step in the accounting cycle.

Fiscal Year

A 12-month period that companies use for accounting purposes and preparing financial reports, which may or may not align with the calendar year.

Quick Ratio

A liquidity ratio that measures a company's ability to meet its short-term obligations with its most liquid assets, excluding inventory.

Assets

Resources owned or controlled by a business or individual, which are expected to produce future economic benefits.