Identify an Advantage of Adopting a Low Minimum Efficient Scale

question 56

Multiple Choice

Identify an advantage of adopting a low minimum efficient scale.

• A) It helps companies reduce the level of initial capital required for business.
• B) It allows the firm to accommodate demands for local responsiveness.
• C) It allows firms discount political risks and other global capital risks.
• D) A minimum efficient scale of a plant allows decentralization of production.

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Definitions:

Cooperative Advertising

A cost-sharing arrangement between manufacturers and retailers or distributors to share the expense of advertising products.

Furniture Store Chains

Retail chains specializing in selling furniture and related home accessories, often operating multiple locations across regions.

Retail Sales Support

Services and activities designed to assist in the selling of products to end consumers in retail settings.

Vertical Marketing Systems

A coordinated structure where producers, wholesalers, and retailers operate as a unified system, often through ownership or contractual relationships, to improve efficiency and reduce costs.