When Jean Cult Inc

question 92

Multiple Choice

When Jean Cult Inc.was operating at the minimum efficient scale of 10,000-12,000 units per month,the firm's cost per unit was $20.However,when the output level was increased beyond 12,000 units,the cost per unit increased to $22.This increase was attributed to the wear-and-tear of the machinery,and complexities of managing and coordinating.What is this phenomenon known as?

• A) resource ambiguity
• B) diseconomies of scale
• C) network effect
• D) learning-curve effect

---

Definitions:

Net Present Value

A financial measurement that calculates the value of a project or investment by discounting the expected future cash flows to their present value using a specific discount rate.

Tractor-Trailer

A vehicle configuration consisting of a front tractor unit coupled to a trailer carrying cargo.

Operating Costs

Expenses associated with the day-to-day functions of a business, excluding costs related to production.

Annual Cost Savings

The reduction in costs achieved during a year due to various savings measures or efficiencies.