Other Things Being Equal, If the Fixed Costs of Setting

question 133

Multiple Choice

Other things being equal, if the fixed costs of setting up a production plant are very high, _____ can make sense.

• A)serving the world market from a single plant sited at a single, optimal location
• B) adopting a low minimum efficient scale
• C) basing production in all the individual national markets
• D) manufacturing in multiple locations

---

Definitions:

Economic Value

The worth of a good or service determined by the benefit it provides to the buyer relative to its cost.

High Salaries

Compensation levels significantly above the average or median for similar roles or industries, often reflecting a high demand for specialized skills or experience.

Price Discrimination

The practice of charging different prices to different consumers for the same product or service, based on factors like willingness to pay, market segmentation, or geographical location.

Elastic Demand

a demand scenario where the quantity demanded of a good or service significantly changes in response to a change in its price.