If a Firm Can Lower Production Costs by Sharing a Resource

question 14

Multiple Choice

If a firm can lower production costs by sharing a resource among one or more of its products, it benefits from ________.

• A) economies of scope
• B) learning curve effects
• C) minimum efficient scales
• D) economies of scale

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Definitions:

Intuiting

The ability to understand or know something immediately, without the need for conscious reasoning; a gut feeling or instinct.

Cognitive Dissonance

A psychological discomfort experienced when an individual holds two or more contradictory beliefs, ideas, or values at the same time.

Escalation

The process of something becoming or being made more intense, severe, or serious.

Optimism

A mental attitude reflecting a belief or hope that the outcome of some specific endeavor, or outcomes in general, will be positive, favorable, and desirable.