Which of the Following Statements Is True of a Production-Oriented

question 5

Multiple Choice

Which of the following statements is true of a production-oriented firm?

• A)It cannot survive when competition is weak.
• B)It believes that people will buy more goods and services if aggressive sales techniques are used.
• C)It can survive and even prosper when demand exceeds supply.
• D)It determines how to deliver superior customer value and implements actions to provide value to customers.

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Definitions:

Fixed Costs

Business expenses that are not affected by changes in the level of production or sales, such as rent and salaries.

Total Variable Costs

The sum of expenses that change directly with the level of output or production volume.

Average Fixed Cost

The total fixed costs of production divided by the number of units produced, indicating cost per unit.

Average Total Costs (ATC)

The total cost of production (fixed plus variable costs) divided by the total quantity of output produced.