As a Result of Economies of Scale, Smaller Advertisers

question 27

Multiple Choice

As a result of economies of scale, smaller advertisers:

• A)are likely to enjoy more favorable advertising time and space than large advertisers.
• B)have declining average costs of production.
• C)get higher advertising rates than large advertisers.
• D)can maintain advertising expenditure shares that are smaller than their market shares.
• E)can accrue the advantages of advertising several products jointly.

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Definitions:

Revenue

The total amount of money generated by a company from its business activities, such as sales of goods or services, before any expenses are deducted.

Salaries Payable

A liability account that records the amounts of wages earned by employees that have not yet been paid to them.

Salaries Expense

An accounting item that represents the total amount paid to employees in the form of salaries over a specific period of time.

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.