Callow Youth Clothing (CYC)declared Bankruptcy in 2007 and Has Since

question 70

Multiple Choice

Callow Youth Clothing (CYC) declared bankruptcy in 2007 and has since closed 27 stores,which amounts to over half of its retail outlets.One of the conditions specified for emergence from bankruptcy is a reduction in the cost of operating the firm's accounting information system.Which of the following behavior is most likely to be recommended?

• A)Replace the existing system with one of a smaller scale.
• B)Customize the existing system.
• C)Outsource system operations.
• D)Purchase a canned software system.

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Definitions:

Efficient Competition

A market scenario where firms can produce the goods and services that consumers demand at the lowest possible cost, maximizing societal welfare.

Price-Taker

An economic actor who accepts the market price as given and has no influence over it due to its small size in the market.

Market Demand

The aggregate amount of a product or service that every consumer in a market is prepared and capable of buying at different price levels.

Long-Run Equilibrium

A state in which market supply equals market demand and all firms in a perfectly competitive market earn zero economic profits.