Large Firms Generally Buy Parts and Assemblies from Smaller Firms

question 90

Multiple Choice

Large firms generally buy parts and assemblies from smaller firms because

• A) doing so creates goodwill.
• B) they are required to do so by government regulations.
• C) they can control small businesses this way.
• D) it is less expensive than making their own.
• E) large firms want to keep small firms in business.

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Definitions:

Advertising Budget

The allocation of funds towards promotional activities intended to build brand awareness, increase product demand, or communicate information to consumers.

Monthly Sales

The total revenue generated from sales activities in one calendar month, often used to track business performance.

Net Operating Income

A company's revenue minus its operating expenses, not including taxes and interest, reflecting the profit generated from regular business operations.

Fixed Expenses

Costs that remain constant for a period of time irrespective of the level of outputs, like rent, salaries, and insurance premiums.