A Survey of a Local Market Provided the Following Average

question 3

Multiple Choice

A survey of a local market 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. What should be the average cost after the acquisition for JCC to justify this merger?

• A) 17.667 percent or lower
• B) 17.667 percent or higher
• C) 17.333 percent or lower
• D) 15.00 percent or lower

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Definitions:

Technological Determinism

A theory suggesting that technology shapes societal structures, values, and processes in a definitive manner.

Langdon Winner

An American philosopher of technology who focuses on the social and political implications of technology.

Human Agency

The capacity of individuals to act independently and make their own free choices, highlighting the role of human action in shaping society.

Invention of Paper

The development of paper as a material for writing, wrapping, and other uses, traditionally attributed to China around 105 AD.