In a Decision to Keep or Replace a Piece of Equipment,calculate

question 83

Multiple Choice

In a decision to keep or replace a piece of equipment,calculate the total yearly expense of keeping the old equipment using the following data.

• A) $105 000
• B) $25 000
• C) $95 000
• D) $130 000

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Definitions:

Economies of Scale

Businesses enjoy cost savings resulting from their size of operations, wherein the cost per unit produced usually drops with greater scale.

Barriers to Entry

Obstacles that make it difficult for new competitors to enter a market, such as high startup costs, access to technology, and strict regulations.

Market Power

The ability of a firm or group of firms to influence or control prices or output in a particular market.

Barriers to Entry

are obstacles that make it difficult for new competitors to enter an industry, including high startup costs, strict regulations, and established brand loyalty.