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rjkz [21]
3 years ago
15

A potato chip manufacturer purchases a potato farm. Which of the following regarding its strategy is true? The manufacturer has

effectively reduced its operating costs by outsourcing its activities. The manufacturer has enhanced utilization by allowing depreciation and other fixed costs to be spread over a larger unit volume.
Business
2 answers:
erma4kov [3.2K]3 years ago
7 0

Answer:

The correct answer is letter "C": The manufacturer has effectively used vertical integration to increase its bargaining position and reduce transaction costs.

Explanation:

Vertical integration occurs when a company purchases and controls other companies along its supply chain. There are two types of vertical integration: backward and forward. In the context of backward vertical integration, a company such as a manufacturer owns companies that supply inputs to manufacturing processes. A corporation owns another business in forward vertical integration, to get closer to the ultimate customer in the supply chain.

Therefore, <em>a potato chip manufacturer by buying a potato farm is engaging in backward vertical integration.</em>

astra-53 [7]3 years ago
6 0

Question:

A potato chip manufacturer purchases a potato farm. Which of the following regarding its strategy is true?

A. The manufacturer has effectively used vertical integration to increase its bargaining position and reduce transaction costs.

B. The manufacturer has enhanced utilisation by allowing depreciation and other fixed costs to be spread over a larger unit volume.

C. The manufacturer has sacrificed quality by using a lower-cost input.

D. The manufacturer has efficiently capitalised on the experience and learning-curve effects within the company.

E. The manufacturer has effectively reduced its operating costs by outsourcing its activities.

Answer:

A. the Manufacturer has effectively used vertical integration to increase it's bargaining position and reduce transaction costs.

Explanation:

Vertical integration is a business strategy whereby a business acquires ownership or controls its suppliers, distributors, or retail locations to control its value or supply chain.

It may also be said that vertical integration has to do with the purchase of a part of all of the production or sales process that was previously outsourced, to have it done in-house.

An example of companies who have done this are:

1. Apple

2. Netflix

3. Comcast (Which acquired NBC)

Businesses can integrate by

  • purchasing their suppliers to reduce the costs of manufacturing or
  • controlling the distribution process that is, owning and controlling the warehousing and delivery of their products etc.

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zmey [24]

Answer:

C) i and ii

Explanation:

Price elastic of demand (PED) of kerosene = 2.2% / 10% = 0.22 price inelastic demand

When two products are substitutes, an increase in the price of one of the products will not only reduce the quantity demanded of that product, but it will also increase the quantity demanded of its substitute products. In this case, an increase in the price of electricity, increases the quantity demanded for kerosene, which means that they are both substitute products.

5 0
3 years ago
If the total utility from consuming the fifth unit of a product is 6 and the total utility from all five units is 162, then the
mylen [45]

Answer:

b) 156

Explanation:

Total utility is the total amount of satisfaction received by a consumer after consuming a given quantity of a product or service. In this question there is the total utility of five product.

Total utility = 162

utility of fifth product = 6

Total utility of other four products = Total utility - utility of fifth product

Total utility of other four products = 162 - 6 = 156

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2 years ago
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4 0
3 years ago
Marginal​ cost-benefit analysis and the goal of the firm   Ken​ Allen, capital budgeting analyst for Bally​Gears, In
mafiozo [28]

Answer:

a.The marginal (added) benefits of the proposed new robotics.

  • $195,000

b. The marginal (added) cost of the proposed new robotics.

  • -$227,200

c. The net benefit of the proposed new robotics.

  • loss =  -$32,200

d. What should Ken recommend that the company do? Why?

  • Based only on this analysis, the company should keep the old robotics. The new robotics are too expensive and do not generate enough benefits.

e. What factors besides the costs and benefits should be considered before the final decision is made?

  • increases in efficiency and reductions in manufacturing time.

Explanation:

Marginal cost benefit analysis refers to analyzing the additional benefits of a new project or activity compared to the benefits generated by an alternative project or activity.

In this case, both alternative should be evaluated as follows:

                                alternative 1           alternative 2        marginal

                                keep robotics        change robotics  benefits

revenue (in              $446,000              $568,000             $122,000

today's $)  

required invest.                   $0             -$227,200           -$227,200

old robotics                         $0                $73,000               $73,000

<u>sales value                                                                                           </u>

marginal benefits / losses                                                  -$32,200

6 0
3 years ago
All of the following are conducive to economic growth except
zysi [14]

Answer:

B. an unfavorable balance of trade and payments

Explanation:

  • The BOP or the balance of trade is defined as the net gains or net exports that make the balance of payments and is said to be favorable when the country export more and imports less and is a positive change.
  • It is said to be negative when the country imports more and exports less thus unfavorable in terms of the trade and payments.
  • <u>Hence it means that the country has a deficit and this can impact the services and is not good for the economic growth perspective.</u>
6 0
3 years ago
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