Identify an Advantage of Adopting a Low Minimum Efficient Scale

question 39

Multiple Choice

Identify an advantage of adopting a low minimum efficient scale.

• A) It helps companies reduce the level of initial capital required for business.
• B) It allows the firm to accommodate demands for local responsiveness.
• C) It allows firms to discount political risks and other global capital risks.
• D) A minimum efficient scale of a plant allows decentralization of production.

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Definitions:

Customer Service

The direct interaction between a consumer making a purchase and a representative of the company that is selling it.

Order Management

The process of tracking and fulfilling sales orders, involving the stages from order receipt, processing, packaging, to shipment and delivery.

Phases

Distinct stages or steps in a process or project, each with its specific objectives and activities.

Substitutability

The degree to which one product or service can be replaced with another to satisfy the same need or want.