Economies in Which Materials and Processes Employed in One Product

question 115

Multiple Choice

Economies in which materials and processes employed in one product can be used to make other,related products are

• A)subassemblies.
• B)economies of scope.
• C)flexible factories.
• D)functional organizations.
• E)economies of scale.

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Definitions:

ATC

Average Total Cost (ATC) refers to the total cost per unit of output, calculated by dividing the total cost by the quantity of output produced.

Economic Loss

The difference between the revenues received from the sale of an output and the opportunity cost of the inputs used.

Average Variable Cost

The variable cost per unit of output, obtained by dividing the total variable cost by the total output.

Marginal Cost

The change in total production cost that comes from making or producing one additional unit.