Terrafugia Transition Is a 19-Foot,two-Seater Road-Drivable,light-Sport Aircraft with an Anticipated

question 160

Multiple Choice

Terrafugia Transition is a 19-foot,two-seater road-drivable,light-sport aircraft with an anticipated price of $250,000.The most likely prospective customers for this flying car would include

• A) students interested in science fiction.
• B) retired seniors receiving social security.
• C) executives for whom time is extremely important.
• D) teens who like to try new things.
• E) All of the people above are likely prospective customers of the Transition.

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Definitions:

Minimum Efficient Scale

The smallest level of production at which a firm can achieve the lowest long-run average total costs.

Constant Returns to Scale

A situation in which the proportionate increase in inputs leads to an equal proportionate increase in outputs, meaning costs and outputs scale equally as production expands.

Diseconomies of Scale

A situation where a business's cost per unit increases as it produces more items, due to inefficiencies that arise with scaling up production.

Plant Size

Refers to the physical capacity or output level of a manufacturing or production facility.