Economies of Scope a Survey of a Local Market Has

question 38

Multiple Choice

Economies of Scope A survey of a local market has provided the following average cost data: Johnson Construction Corp. (JCC) has assets of $5 million and an average cost of 15 percent. Anderson Architects (AA) has assets of $8 million and an average cost of 20 percent. Cole Home Builders (CHB) has assets of $8 million and an average cost of 17 percent. For each firm, average costs are measured as a proportion of assets. JCC is planning to acquire AA and CHB with the expectation of reducing overall average costs by eliminating the duplication of services. If JCC plans to reduce operating costs by $300,000 after the merger, what will the average cost be for the new firm?

• A) 16.238%
• B) 15.00%
• C) 17.33%
• D) 17.667%

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Definitions:

Big Five Factors

A model describing human personality through five broad dimensions: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Personality

The combination of characteristics or qualities that form an individual's distinctive character, influencing their behaviors and responses.

Maslow's Approach

A psychological perspective focused on a hierarchy of needs culminating in self-actualization, developed by Abraham Maslow.

Personality

The combination of characteristics or qualities that form an individual's distinctive character and behavioral patterns.