The Ability to Spread Fixed Costs Over a Large Volume

question 115

Multiple Choice

The ability to spread fixed costs over a large volume results in a cost-savings phenomenon referred to as:

• A)volume synergies.
• B)economies of scale.
• C)captured savings.
• D)size effects.

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Definitions:

Consumption

The process by which goods and services are used up or consumed by individuals or groups.

Income

The monetary payment received for labor, services, or investment, constituting the financial resource individuals, businesses, or governments use for spending and saving.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan balance.

Utility Function

A formula that assigns numerical values to utilities in order to represent a consumer's preferences consistently. (Duplicate rephrase)