Economies of scale and scope
What is the approximate observed median learning curve slope for typical firms?
.8
In the BCG Growth Share Matrix, what is a cash cow?
A product in a stable or declining market with high relative share
Which of the following does not benefit from the cube-square rule's contribution to economies of scale?
Automotive production
What term for production describes a situation where factories and assembly lines represent a significant percentage of total costs?
Capital intensive
Which of the following is not a reason a supplier might seek to sell in bulk?
Each sale involves setting up a different production run
What are economies of density as referred to in the airline industry?
Economies of scale along a given route
Why is firm specific learning better in general for an organization?
Ensures worker knowledge is tied to current employment
What kind of economies come from reductions in cost due to adoption of technology that has high fixed costs, but lower variable costs?
Long-run economies of scale
How does carrying inventories contribute to economies of scale?
Minimizes the chance of stock-out
Which of the following is not a major source of scale or scope economy?
Movement of production from smaller to larger facilities
Which of the following is not a benefit Ace captures through a cooperative of stores while maintaining independent store ownership?
No central office providing direction
Which of the following best describes economies of scope?
Savings are achieved when a firm produces a wider variety of goods
. What kind of economies come from reductions in average costs due to increases in capacity utilization?
Short-run economies of scale
By using instrumental variables, what was Ramanarayanan able to suggest regarding the learning curve?
Surgeons who treat more patients after the retirement of a colleague experience better outcomes
Which of the following is a characteristic of economies of scale?
The average cost declines as output increases
Which of the following is not a product specific fixed cost?
The cost of administrative expenses
What is the minimum efficient scale (MES) of production?
The minimum point on a U-shaped average cost curve
If a firm enjoys lower costs due to a complex labor-intensive process, which of the following statements would then be true?
An example of this process could be the practice of anti-trust law
. How does umbrella branding aid economies of scale and scope?
Increases effectiveness of advertising due to offering a broad product line under one name
What might cause a firm to want to increase production past the point where additional revenues offset additional costs?
The firm is enjoying the benefits of the learning curve
According to Smith's theorem, which of the following statements would be true in medical markets for thoracic surgery?
When demand for thoracic surgery is low, the market will not support a specialized surgeon