Use a Long-Run Average Cost Curve Graph to Illustrate How

question 165

Essay

Use a long-run average cost curve graph to illustrate how diseconomies of scale would not make it beneficial for two companies to go through with a merger.

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Definitions:

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the correct periods.

Periodic Inventory System

An inventory accounting system where the inventory count is physically conducted at specific intervals, typically at the end of an accounting period.

Net Method

An accounting method that records purchases and sales of inventory net of discounts at the time of transaction.

Credit Terms

Conditions under which credit is extended to a buyer, including the repayment time frame, interest rates, and penalties for late payment.