Omega Recently Found That Its Flagship Product Had Cost the Company

question 94

Multiple Choice

Omega recently found that its flagship product had cost the company $129 to manufacture when the company launched it ten years ago.Now,the same product cost just $72 to manufacture.Which of the following terms best represents the systematic reductions in production costs that Omega has achieved over the ten-year life of its flagship product?

• A)global web
• B)dispersion linkage
• C)economies of scale
• D)experience curve
• E)efficiency frontier

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Definitions:

Inflation Rate

The rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Convertible Bond

A type of bond that can be converted into a predetermined amount of the issuer's equity at certain times during its life, usually at the discretion of the bondholder.

Put Option

A financial contract giving the holder the right, but not the obligation, to sell a specified amount of an asset at a set price within a specified time.

Call Option

A financial contract giving the holder the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a specified price within a specific period.