A Step Fixed-Cost Function

question 172

Multiple Choice

A step fixed-cost function:

• A)is fixed over the short run but not over the long run
• B)is often approximated with a continuous variable-cost function
• C)remains the same over a narrow range of activity
• D)example includes setup costs

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Definitions:

Consolidation

The process of combining two or more companies into a single entity to enhance competitive strength and efficiency.

Merger

The combination of two or more companies into a single entity, with the aim of achieving greater efficiencies or market share.

Acquiring Firms

Companies that purchase other companies in mergers and acquisitions to grow in size, diversify, or achieve other strategic goals.

Spin-Off

The distribution of shares in a subsidiary to existing parent company shareholders.