If the Minimum Efficient Scale in Toaster Production Is 500

question 152

True/False

If the minimum efficient scale in toaster production is 500, 000 units per year, the average cost of producing 300, 000 toasters is greater than the average cost of producing 500, 000.

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Definitions:

Purchasing

involves the process of acquiring goods or services in exchange for monetary compensation.

Apartment Building

A residential building containing multiple apartments or units meant for separate tenants.

Warranty

A promise, statement, or other representation that an item has certain qualities; also, an insured’s promise to abide by restrictions, especially those written into an insurance policy. Also, an obligation imposed by law that an item will have certain qualities. Warranties made by means of a statement or other affirmation of fact are called express warranties; those imposed by law are implied warranties.

Insured

A party that is protected by an insurer against losses caused by the risks specified in an insurance policy.