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:

Decrease

A reduction in size, quantity, or degree.

Increase

A rise in the quantity or value of something.

Semiconductors

Materials with electrical conductivity between that of a conductor and an insulator, used in electronic components for controlling electrical current.

Conductors

Materials that allow the flow of electric current through them, often used in electrical wiring and components.