A Merger Between Frosted Confections,Inc

question 27

Multiple Choice

A merger between Frosted Confections,Inc.,and Great Brewing Company,in which Frosted absorbs Great Brewing,can be expressed as Frosted Confections + Great Brewing =

• A) Frosted Confections.
• B) Hot Coffee Corporation.
• C) Hot Coffee Corporation + Iced Pastries Corporation.
• D) Iced Pastries Corporation.

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Definitions:

Fixed Cost

Expenses that do not change with the level of output or sales in the short term, such as rent, salaries, and insurance.

Output

The total amount of goods or services produced by a company, industry, or economy over a certain period.

Constant Returns To Scale

Long-run average total cost is constant as output increases.

Long-Run Average Total Cost

The average cost per unit of output when all inputs, including those typically fixed, are variable and optimized.