If Economies of Scale Are Relatively Unimportant in an Industry

question 8

Multiple Choice

If economies of scale are relatively unimportant in an industry, the typical firm's long-run average total cost curve will reach a minimum at a level of output that is a ________ fraction of total industry sales.The industry will be ________.

• A)large; competitive
• B)large; an oligopoly
• C)small; competitive
• D)small; an oligopoly

Understand the definition and purpose of a business plan.

Recognize the role and types of financing available to small businesses.

Comprehend how small businesses impact the U.S. economy.

Identify reasons for business failures and successes.

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Definitions:

Inventory Reporting

The process of documenting the quantity and value of a company's stock of goods.

FOB Destination

A shipping term indicating that the seller retains ownership and responsibility for the goods until they are delivered to the buyer's specified location.

Ending Inventory Balance

The total value of all goods available for sale at the end of an accounting period.

Net Realizable Value

The estimated selling price of goods minus the costs of their sale or disposal, utilized in inventory valuation and accounts receivable.