For a Firm to Maximize Its Profitability,it Is Necessary That

question 114

Multiple Choice

For a firm to maximize its profitability,it is necessary that it

• A)creates products similar to the products of its competitors.
• B)does not configure its internal operations to reduce costs.
• C)minimizes the value of the consumer surplus.
• D)picks a position on the efficiency frontier that is viable.
• E)strips all the value out of its product offering.

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Definitions:

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, resulting in cost per unit of output decreasing with increasing scale.

3-D Printers

Technology that creates three-dimensional objects from digital models by layering materials.

Explicit Costs

The direct payment costs to others in the course of running a business or undertaking an economic transaction.

Implicit Costs

Costs that represent forgone opportunities, often not directly outlaid but incurred when resources are used for one purpose over another.