Economies of Scale Arise from All of the Following Sources

question 78

Multiple Choice

Economies of scale arise from all of the following sources, EXCEPT:

• A) increasing fixed costs by limiting them to small volumes.
• B) serving domestic and international markets from the same production facilities.
• C) serving global markets.
• D) bargaining with suppliers to bring down the cost of key inputs.

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Definitions:

Accounts Receivable

Amounts receivable by a firm for goods or services rendered to customers, awaiting payment.

Fixed Asset Investment

The acquisition of long-term physical assets by a company to be used in its operations for generating income.

Depreciated

A decrease in the value of an asset over time, often due to wear and tear or obsolescence, recognized in accounting to allocate the cost of an asset over its useful life.

Salvage Value

The estimated residual value of an asset after it has completed its useful life and cannot be used for production.