The Larger the Firm,the Lower the Cost Per Unit

question 10

Multiple Choice

The larger the firm,the lower the cost per unit. This is a principle of:

• A)Gains from trade
• B)Product differentiation
• C)Abandoned product ranges
• D)Imperfect competition
• E)Economies of scale

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Definitions:

Discontinued Item

A component of a company's operations that has been disposed of or is held for sale, and its earnings are separated out on the income statement.

MACRS

Modified Accelerated Cost Recovery System, a method of depreciation for tax purposes in the United States that allows faster write-offs of assets.

Straight-Line

A method of calculating depreciation of an asset, which allocates an equal amount of depreciation to each year of the asset's useful life.

Sum-Of-Years' Digits

A depreciation method that accelerates the expense recognition, using a decreasing fraction of years remaining over the sum of the years' digits.