It results in lower short run average cost in economies of sale .
<h3>Economies of scale</h3>
Economies of scale refers to the situation where, as the quantity of output goes up, the cost per unit goes down. This is the idea behind “warehouse stores” like Costco or Walmart. In everyday language: a larger factory can produce at a lower average cost than a smaller factory. Figure 2 illustrates the idea of economies of scale, showing the average cost of producing an alarm clock falling as the quantity of output rises. For a small-sized factory like S, with an output level of 1,000, the average cost of production is $12 per alarm clock. For a medium-sized factory like M, with an output level of 2,000, the average cost of production falls to $8 per alarm clock. For a large factory like L, with an output of 5,000, the average cost of production declines still further to $4 per alarm clock.
One prominent example of economies of scale occurs in the chemical industry. Chemical plants have a lot of pipes. The cost of the materials for producing a pipe is related to the circumference of the pipe and its length. However, the volume of chemicals that can flow through a pipe is determined by the cross-section area of the pipe.
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The answer to your question is true.
Answer: The correct answer is "C) a cost that cannot be avoided because it has already been incurred.".
Explanation: Sunk costs are those costs that have already been incurred and cannot be recovered in the future.
Example: Suppose a company wants to launch a new product for which it has commissioned a market study whose cost is $ 5000.
Once the market study is obtained, the company is not convinced that the product will be successful. When analyzing the decision The first thing to recognize that the expenses incurred ($ 5000) are sunk costs, will not be recovered and therefore should not influence the decision about the product.
Answer:
they are debited to a Work in Process account
Explanation:
The journal entry to record the assignment of manufacturing overhead costs to production in a process cost system is done as follows:
Work - In Process (debit)
Overheads (credit)
<u>The only relevant difference between the </u><u>curves </u><u>for a </u><u>monopoly</u><u> and the equivalent ones for a firm in a competitive market is that </u><u>marginal</u><u> and </u><u>average revenue slope</u><u> downward for the </u><u>monopolist.</u>
What type of curve does a monopoly have?
- A monopoly encounters a downward-sloping market demand curve in Panel (b).
- It chooses its profit-maximizing output in its capacity as a profit maximizer.
- However, after determining that quantity, it uses the demand curve to determine the price at which it can sell that output.
What is a difference between a monopoly and perfect competition ?
While in monopolistic competition, businesses produce slightly different goods, in perfect competition, businesses produce identical goods.
How does a demand curve for a monopoly differ from a demand curve for a perfectly competitive firm?
Because the monopolist is the sole company operating in the market, its demand curve is identical to the market demand curve, which is downward-sloping as opposed to the demand curve for a perfectly competitive firm.
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