Calculation of Average Costs with Economies of Scope Crib World

question 58

Multiple Choice

Calculation of Average Costs with Economies of Scope Crib World is considering a merger with Tots Supply Stores.Crib's total operating costs of producing services are $250,000 for sales volume of $1.25 million.Tots' total operating costs of producing services are $210,000 for a sales volume (J_P) of $900,000.For a sales volume of $2.15 million,calculate the reduction in production costs the merged firms need to experience such that the total average cost (TAC) for the merged firms is equal to 17.5 percent.

• A)Decrease of $376,250
• B)Decrease of $83,750
• C)Decrease of $127,500
• D)Decrease of $87,500

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Definitions:

Enthusiastic Audience

A group of people who show a high level of excitement or eagerness towards a particular event, presentation, or performer.

Athletic Performance

The physical and mental execution exhibited by athletes during sport or exercise, often measured by speed, strength, endurance, and coordination metrics.

Storming Stage

The second phase of team development characterized by conflict and competition as individual personalities emerge and members vie for positions and roles within the team.

Team Development

The process of improving the cohesiveness and performance of a team through various stages of growth and interaction.