Which of the Following Is a Suitable Description of the Term

question 42

Multiple Choice

Which of the following is a suitable description of the term 'economies of scope'?

• A)the use of several inputs to produce one common output
• B)the ability to generate cost savings by producing more than one output with the same inputs
• C)the ability to lower average operating costs by expanding its output of financial services
• D)the ability to lower average operating costs by lowering its output of financial services

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Definitions:

Unit Selling Price

The amount of money charged to the customer for a single unit of a product or service.

Unit Sales Price

The price at which a single unit of product is sold, reflecting the cost plus any markup or minus any discounts.

Unit Variable Cost

The cost per unit to produce a single product, encompassing materials, labor, and all other expenses that fluctuate with the level of production.

Fixed Costs

Fixed overheads, including rental costs, salary payments, and insurance fees, that stay unchanged with fluctuations in production or sales figures.