What Will Be the Normal Impact on Costs When Managers

question 11

Multiple Choice

What will be the normal impact on costs when managers buy convenience items rather than make those same items from scratch?

• A) Food costs increase and labor costs increase
• B) Food costs decrease and labor costs increase
• C) Food costs increase and labor costs decrease
• D) Food costs decrease and labor costs decrease

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Definitions:

Kinked Demand

A market situation where a firm’s demand curve has a distinct bend, reflecting different elasticity above and below the market price.

Highly Concentrated Industry

An industry where a small number of firms hold a large market share, leading to reduced competition.

Ford Motor Company

An American multinational automaker founded by Henry Ford, known for revolutionizing the automobile industry with its assembly line production method.

Homogeneous Oligopoly

A market structure in which a few companies sell products that are identical or very similar.