Selecting the Lowest Cost Technology

question 6

Multiple Choice

Selecting the lowest cost technology:

• A)Will result in the highest long-run NPV
• B)Could rule out future flexibility
• C)Will minimize the cost of future upgrades
• D)May not permit future expansion

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Definitions:

Wage Rates

The standardized amount of payment given to employees for their services, usually expressed per hour or per annum.

Labor Productivity

The quantity of goods and services that a worker produces in a given amount of time.

Dumping

The practice of exporting goods at a price lower than the home-market price, often with the intent of undermining competition in the importing country.

Price Discrimination

The selling of a product to different buyers at different prices when the price differences are not justified by differences in cost.