Which of the Following Indicates That Economies of Scale Have

question 18

Multiple Choice

Which of the following indicates that economies of scale have been overridden by other factors?

• A) A company seeking to save on architect's fees during its move to Maryland copies the same building it used in San Francisco, so now it occupies the only office in Baltimore built to withstand earthquakes.
• B) The workers on the night shift at the Roadkill Diner, having no customers of their own, peel 400 potatoes, fill 300 catsup bottles, fry 100 pounds of bacon, and brew 80 quarts of coffee for the morning shift.
• C) Denny's Restaurant serves potatoes with its breakfasts nationwide, but in the South you can get grits instead.
• D) The Creepy Critters Summer Camp decides not to give campers a choice between hamburgers and hot dogs but makes creamed chipped beef on toast for everybody.
• E) Henry Ford said that his customers could have any color car they wanted, as long as they wanted black.

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Definitions:

Tax Rate

The proportion of income that the government taxes an individual or business.

Profit and Loss Statement

A financial statement that summarizes revenues, costs, and expenses incurred during a specific period, usually a fiscal quarter or year.

Total Contribution Margin

The difference between total sales revenue and total variable costs, indicating how much revenue is available to cover fixed costs and generate profit.

Sold Units

The total number of units of a product that have been sold during a specific period.