Which of the following statement is correct? Select one: a. Firms in labor-inten

Question

Which of the following statement is correct?

Select one:

a. Firms in labor-intensive industries with enormous production economies of scale may be forced to sell overseas in order to spread their overhead over a larger quantity of sales.

b. The unit cost reduction through high volume production is called the economies of scale.

c. All the answers are incorrect.

d. The multinational financial system enables companies to avoid exchange rate risk.

e. The distinguishing characteristic of the multinational corporation (MNC) is its emphasis on subsidiary performance

Explanation / Answer

Option.B) The unit cost reduction through high volume production is called the economies of scale.

Economies of scale refer to reduced costs per unit that arise from increased total output of a product. For example, a larger factory will produce power hand tools at a lower unit price, and a larger medical system will reduce cost per medical procedure.

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