If a Firm Decreases Its Plant Size and Finds That

question 98

Multiple Choice

If a firm decreases its plant size and finds that its long-run average costs have decreased, then

• A)its labor is more productive in a smaller plant.
• B)its diseconomies of scale are less.
• C)the firm should reduce its plant size even more.
• D)the firm is now profitable.

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Definitions:

Defensive Strategy

Seeks to protect the organisation by doing the minimum legally required to satisfy social expectations.

Social Responsibility

The ethical framework that suggests an entity, be it an organization or individual, has an obligation to act for the benefit of society at large.

Economic Responsibility

The obligation of an organization to make decisions that benefit the economic well-being of society and its stakeholders.