The Fact That a Large Company Can Enjoy Savings from Producing

question 38

Multiple Choice

The fact that a large company can enjoy savings from producing goods in high volume that are not available to a small company is called

• A) economies of scale.
• B) horizontal integration.
• C) vertical integration.
• D) economies of scope.
• E) monopoly gains.

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Definitions:

Income Statement

A report detailing a firm's income, expenditures, and net income or loss for a certain time frame.

Operating Cycle

The time it takes for a company to purchase inventory, sell it to customers, and collect the cash from the sale.

Automobile Manufacturer

A company engaged in the designing, production, marketing, and selling of motor vehicles.

Earnings Per Share

A financial ratio indicating the portion of a company's profit allocated to each outstanding share of common stock.