Economies of Scale in Activities Such as R&D,new Product Development,advertising,and

question 58

Multiple Choice

Economies of scale in activities such as R&D,new product development,advertising,and government lobbying arise mainly because of:

• A)Specialization-as these activities grow in scale,there are productivity gains from division of labor
• B)Indivisibilities-these activities involve large fixed costs that can be spread over a larger volume of output
• C)Technical input-output relationships-increases in output do not require proportionate increases in input
• D)Increased bargaining power-large companies can negotiate lower input prices for these activities

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Definitions:

Contract Rescission

The legal cancellation or termination of a contract, returning all parties to their positions prior to the agreement.

Equitable Remedy

A remedy granted by courts in situations where money damages are inadequate, involving actions like injunctions or specific performance.

Mistake

An erroneous belief about the facts of a contract at the time the contract is concluded. When a mistake occurs, legal assent is absent.

Material Effect

A significant impact or change on a company's operations, financial condition, or future prospects.