The Per Unit Decrease in Cost That Occurs When Volume

question 20

Multiple Choice

The per unit decrease in cost that occurs when volume increases is known as

• A)economies of scale
• B)economies of scope
• C)diseconomies of scale
• D)the best operating level

Understand the impact of working capital on a firm’s financial policies.

Evaluate the significance of efficient working capital management.

Understand the sources of short-term financing and their costs.

Recognize the role of aggressive working capital policies and their risk implications.

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Definitions:

Unemployment

The situation in which individuals who are capable of working and are actively seeking employment are unable to find a job.

Inflation Rates

The frequency at which prices for goods and services overall increase, devaluing the purchasing capacity.

Natural Rate

often refers to the natural rate of unemployment, where the economy is at equilibrium, taking into account the frictional and structural factors.

Potential GDP

The maximum possible level of output an economy can achieve when it is most efficiently utilizing its resources.