When a Firm Cannot Realize the Cost Savings from Economies

question 55

True/False

When a firm cannot realize the cost savings from economies of scale all by itself, it may join in a strategic alliance with other firms so that together both firms will have sufficient volume to be able to gain the cost advantages of economies of scale.

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Definitions:

Salaries

Regular payments made to employees for performing their jobs, typically expressed as an annual amount but paid in smaller increments such as monthly or bi-weekly.

Expense Incurred

A cost that has been realized during the performance of business activities, pending payment or already paid.

Revenue Earned

Income received by a company from its business activities, such as sales of products or services.

Mortgage Payable

A liability account on the balance sheet representing the amount owed by a company or individual for the property's mortgage.