While Maintaining Multiple Production Sites Does Provide a Firm Valuable

question 22

Multiple Choice

While maintaining multiple production sites does provide a firm valuable options,

• A)a firm may miss out on economies of scope.
• B)a firm may miss out on economies of scale.
• C)a firm may find that exchange rate changes can fully offset the advantage of multiple manufacturing sites.
• D)both a and b

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Definitions:

Perfectly Competitive

Refers to a market structure where there are many buyers and sellers, all producing homogenous products, with no single participant having the power to influence the market price.

Industry Supply Curve

A graphical representation showing the relationship between the price of a good and the total output of the industry for that good.

Elastic

Describes a situation where the quantity demanded or supplied changes significantly in response to a change in price.

Average Variable Cost

The total variable cost divided by the quantity of output produced, representing the variable cost of producing one unit of a good or service.