Neon Electronics Inc

question 9

Multiple Choice

Neon Electronics Inc.sourced touch screens required for its tablet computers,cell phones,and televisions from a manufacturer in China.But the demand for such components was high globally,and the supplier could not meet the quality standards of Neon Electronics.Thus,Neon Electronics decided to set up its own unit to develop and manufacture the required touch screens.What does this scenario best illustrate?

• A) crowdsourcing
• B) new product development
• C) backward vertical integration
• D) conglomerate diversification

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Definitions:

Total Cost

The complete sum of all expenses incurred in the production and delivery of a product or service, including fixed and variable costs.

Research and Development Costs

Expenses associated with the research and development activities of a company, aiming at new product development and improvement of existing products.

Economies of Scale

Cost advantages that a business can achieve due to an increase in the scale of production, leading to lower per-unit costs.

Diseconomies of Scale

The phenomenon where, as a firm or production process increases in size beyond a certain point, the cost per unit increases, leading to reduced efficiency.