If a Firm That Uses a Production Process That Yields

question 32

Multiple Choice

If a firm that uses a production process that yields economies of scale charges a price equal to ________,then profit will be ________.

• A) marginal cost; negative
• B) marginal revenue; maximized
• C) marginal cost; maximized
• D) marginal revenue; positive
• E) marginal cost; positive

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Definitions:

Offshoring

Relocation of business processes to lower-cost locations overseas.

Partnership

A type of business organization where two or more individuals manage and operate a business in accordance with the terms and objectives set out in a Partnership Agreement.

Specific Undertaking

A Specific Undertaking refers to a particular project or task that is distinctly defined within the scope of work or agreement.

Joint Venture

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task, which could be a new project or any other business activity.