Business Concepts Quiz

What are economies of scale?

• Rising costs due to business expansion

• Increased revenues from marketing

• Cost advantages gained as a business expands

• Decreased efficiency when a business expands

Which scenario best describes internal growth?

• Expanding by purchasing competitors

• Increasing production using reinvested profits

• Acquiring new technology through mergers

• Reducing costs by outsourcing

A company sells 500 units at a price of $10 per unit. What is the company's revenue?

• $5,000

• $500

• $50,000

• $10,000

Total costs are calculated by:

• Revenue minus variable costs

• Revenue plus fixed costs

• Fixed costs plus variable costs

• Revenue minus fixed costs

If a business merges with another company in the same industry to expand market share, this is called:

• Vertical integration

• Horizontal integration

• Internal growth

• Economies of scale

A company has fixed costs of $10,000, sells each unit for $20, and has variable costs of $5 per unit. Calculate the break-even point using the provided formula: Break-even = Total Fixed Costs / (Price Per Unit – Variable Cost Per Unit)

• 400 units

• 500 units

• 1000 units

• 2000 units

What occurs at the break-even point?

• Revenues equal total costs

• Revenues exceed total costs

• Variable costs equal fixed costs

• Revenues are less than total costs

A company's fixed costs are $8,000, selling price is $25 per unit, and variable cost is $5 per unit. What is the break-even point? (Formula not provided)

• 300 units

• 400 units

• 500 units

• 400 units

A company experiences increased complexity and rising costs after becoming too large. This illustrates:

• Economies of scale

• Diseconomies of scale

• Internal growth

• Horizontal integration

A bakery sells pastries for $5 each. Fixed costs are $2,000, and variable costs per pastry are $2. Calculate total costs if 1000 pastries are produced.

• $2,000

• $3,000

• $5,000

• $7,000