Which of the Following Best Accounts for the Success of Standard

question 24

Multiple Choice

Which of the following best accounts for the success of Standard Oil?

• A) Its scientists found new technical processes for refining oil more efficiently.
• B) It bought out the Erie Railroad in order to keep transportation charges low.
• C) It was one of the first companies to invest heavily in advertising.
• D) Rockefeller was lucky to find the highest-quality oil on his Ohio farm.
• E) Its corporate structure-known as vertical integration-allowed the company to grow tremendously.

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Definitions:

Diseconomies of Scale

The phenomenon where, beyond a certain point, the cost per unit increases as the scale of operations expands.

Firm Size

A measure of a company's scale or magnitude, often estimated by metrics like sales, assets, or the number of employees.

Acquisition

It refers to the process or action by which one company takes over another company, either through purchase of its shares or assets.

Economy of Scale

Economy of Scale refers to the cost advantage that arises with increased output of a product, as fixed costs are spread out over more units of production.