Firms Coordinate Economic Activity More Efficiently Than Markets When Firms

question 87

Multiple Choice

Firms coordinate economic activity more efficiently than markets when firms have

• A)lower transactions costs.
• B)economies of scale.
• C)economies of scope.
• D)economies of team production.
• E)all of the above

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Definitions:

Payback Period

The length of time required to recoup the funds expended in an investment, or the time taken for an investment's returns to cover its cost.

Investment's Cash Flows

The inflows and outflows of cash associated with investments, including initial costs, returns, dividends, and final sale values.

Straight-Line Depreciation

A methodology for sharing out the expense of a tangible asset over its operational period in consistent yearly dividends.

Average Accounting Rate

The rate of return on an investment, calculated by dividing the average profit by the average amount invested. This is a rephrased definition for Average Accounting Return.