The Table Given Below Shows the Average Total Cost of Production

question 56

Multiple Choice

The table given below shows the average total cost of production of a firm at different levels of the output.Table 8.5

-All these factors can lead to economies of scale in production, except:

• A)division of labor that helps in specialization.
• B)merger of two firms.
• C)hiring larger machines which are more efficient than the smaller ones.
• D)increase in overhead expenses.
• E)research and development.

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Definitions:

Liberal Return Policy

A company policy that allows customers to return purchased items with minimal restrictions, aiming to enhance customer satisfaction and trust.

Recognizes Revenue

The process of recording revenue in the financial statements when it is earned and realizable.

Factoring Arrangement With Recourse

A financial transaction where a business sells its receivables to a third party (factor) but must buy back any uncollected receivables, thus bearing the risk of default.

Holdback

A portion of the purchase price of an asset that is withheld until certain conditions have been met, ensuring fulfilment of contractual terms.