Answer:
quantity of product produced in a given period increases, the cost of manufacturing each unit decreases
Explanation:
Economies of scale happens when the average total cost (variable + fixed production costs per unit) decreases as total output increases. This generally takes place because fixed costs are the same for a small number of units produced or a large number of units produced, so the average fixed cost per unit tend to decrease as more units are produced (at least up to certain point). Variable production costs per unit can also decrease as total output increases since materials might be purchased in larger quantities resulting in higher discounts or labor productivity increases.
Answer:
They should operate Mine 1 for 1 hour and Mine 2 for 3 hours to meet the contractual obligations and minimize cost.
Explanation:
The formulation of the linear programming is:
Objective function:
Restrictions:
- High-grade ore: 
- Medium-grade ore: 
- Low-grade ore: 
- No negative hours: 
We start graphing the restrictions in a M1-M2 plane.
In the figure attached, we have the feasible region, where all the restrictions are validated, and the four points of intersection of 2 restrictions.
In one of this four points lies the minimum cost.
Graphically, we can graph the cost function over this feasible region, with different cost levels. When the line cost intersects one of the four points with the lowest level of cost, this is the optimum combination.
(NOTE: it is best to start with a low guessing of the cost and going up until it reaches one point in the feasible region).
The solution is for the point (M1=1, M2=3), with a cost of C=$680.
The cost function graph is attached.
Answer:
The answer is (A) They undergo continuous change.
Explanation:
To remain competitive in today’s world, a company must be willing to continue changing according to what the market currently needs and will need in the future. When a company remains stagnant, it would be outpaced by its competitors. Most of the household names that we commonly encounter maintains a spirit of continuous improvement – and we can encounter this from the innovative product they choose to make, better customer experience, or improvement in internal business process.
Answer: A cash sale
Explanation: In simple words, liquidity refers to the ability of an organisation to bear its short term expenses. For that a company must have cash or some assets that can be readily converted into cash in case of need.
Hence Sally should sell her company in cash sale as it will result in inflow of cash which will create liquidity and also the consideration will be certain with short timely payments.
Other option such as IPO or stock for stock might result in increase in value but certainly won't give her liquidity.
