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solniwko [45]
4 years ago
6

Economies of scale: Question 1 options: A) are available to small firms but not to large firms due to management inefficiencies.

B) are achieved when a firm reduces its average cost of goods as it produces more. C) can be avoided by purchasing supplies and raw materials in large quantities. D) help explain the success of small businesses.
Business
1 answer:
Akimi4 [234]4 years ago
3 0

Answer:

The correct answer is option B.

Explanation:

Economies of scale refer to the situation when a firm is able to reduce its average cost of production as it goes on increasing its level of output while the price of inputs is constant.

The average cost of production is the ratio of the total cost incurred and the total output produced. As the number of output goes on increasing after a certain limit, the average cost starts to decline.

The larger the firm the more it will be able to save the cost. That's the reason why large businesses are more successful.

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scoundrel [369]

Answer:

They are too restrictive in economic freedom

Explanation:

6 0
3 years ago
Read 2 more answers
Tony's Deli has cash of $145, accounts receivable of $99, accounts payable of $219, and inventory of $413. What is the value of
grigory [225]

Answer:

the value of the quick ratio is 1.11 times

Explanation:

The computation of the value of the quick ratio is shown below:

Quick Ratio = Total Quick Assets ÷ Total current liabilities

= [Cash + Accounts Receivables] ÷ Accounts Payable

= [$145 + $99] ÷ $219

= $244 ÷ $219

= 1.11 Times

Hence, the value of the quick ratio is 1.11 times

4 0
3 years ago
oneycutt Co. is comparing two different capital structures. Plan I would result in 39,000 shares of stock and $108,000 in debt.
Mila [183]

Answer:

All equity plan:

EPS = $160,000 / 42,000 = $3.81

Plan I:

EPS = [$160,000 - ($108,000 x 7%)] / 39,000 = $152,440 / 39,000 = $3.91

Plan II:

EPS = [$160,000 - ($324,000 x 7%)] / 33,000 = $137,320 / 33,000 = $4.16

Plan II is better since the resulting EPS is higher than the other alternatives.

8 0
3 years ago
Assume that the required reserve ratio is 20 percent. If the Federal Reserve buys $80 million in government securities from comm
Anni [7]

Answer: increase by $80 million, and the maximum money-lending potential of the commercial banking system will increase by $400 million

Explanation:

Based on the information given in the question, the money multiplier will be calculated thus:

Money multiplier = 1/Required reserve ratio

where,

Required reserve ratio = 20%

Money Multiplier will now be:

= 1/0.20

= 5

Therefore, the maximum money-lending potential will be:

= $80 million × 5

= $400 million

Therefore, the money supply will by $80 million, and the maximum money-lending potential of the commercial banking system will increase by $400 million

5 0
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Mice21 [21]

Answer:

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