Which of the Following Is True of Economies of Scale

question 129

Multiple Choice

Which of the following is true of economies of scale?

• A)It increases average unit cost by channeling fixed costs toward defined volumes.
• B)A firm may not be able to attain an efficient scale of production unless it serves global markets.
• C)The ability to spread variable costs over a large volume is a source of economies of scale.
• D)Global sales decreases a firm's bargaining power with suppliers as they are more dependent on their services.

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Definitions:

Current Stock Price

The price at which a specific stock is currently trading on the stock market.

Preferred Stock

A category of corporate ownership that has a greater entitlement to the company's assets and profits compared to common stock, typically receiving payouts before common stockholders.

Rate of Return

The profit or deficit yielded from an investment across a specific timespan, explicated as a percentage of the investment’s base cost.