Large firms and Small firms Assessment

What is the primary difference between the short-run and long-run in business operations?

• In the short-run, all resources are variable

• In the long-run, all resources are fixed

• In the short-run, at least one resource is fixed

• Both periods have the same resource flexibility

When a firm experiences economies of scale, what happens to its average cost per unit?

• It remains constant regardless of production volume

• It increases as production volume increases

• It decreases as production volume increases

• It fluctuates randomly with production changes

What is horizontal integration in business growth?

• When firms acquire their suppliers

• When firms join with similar product producers

• When firms acquire their distributors

• When firms diversify into different industries

Why do small firms often survive in markets dominated by large companies?

• They have higher overhead costs

• They are less flexible to market changes

• They offer personalized service

• They avoid niche markets

What characterizes a multinational company?

• Operating in a single country only

• Having multiple headquarters but no foreign facilities

• Operating in multiple countries with one headquarters

• Serving only domestic markets

Which outcome might occur when a firm doubles its inputs?

• The output will always exactly double

• The output will always be less than double

• The output could be more or less than double

What is a conglomerate in business terms?

• A company focused on a single industry

• A group integrated with different industries

• A small specialized firm

• A local business operation

Which is NOT mentioned as a reason for small firms' success?

• Innovation and creativity

• Mass production capabilities

• Strong customer relationships

• Agility in decision-making

What is an example of external economies of scale?

• Technical economies

• Managerial economies

• Specialized labor

• Purchasing economies