The River Rouge plant was built by the Ford Motor Company in the 1920s to produce the company's Model A car. Which of the following is evidence that the River Rouge plant suffered from diseconomies of scale?
A) Model A cars made at the River Rouge plant failed to earn a profit. Ford reduced the average cost of the Model A by cutting its employees' wages.
B) Model A cars made at the River Rouge plant failed to earn Ford a profit. Ford eventually constructed smaller plants to make the Model A at a lower average cost.
C) Model A cars made at the River Rouge plant failed to earn a profit because the price of steel used to manufacture the Model A rose when workers in the steel industry went on strike.
D) Despite an expensive advertising campaign the Model A did not earn the company a profit.
B
You might also like to view...
As of the end of 1994 the country in our survey with the smallest stock market in dollar terms was
A) the United States. B) the United Kingdom. C) Japan. D) Germany.
In the fooling model's labor market diagram, from an initial intersection point of the labor supply and demand curves, tracing "northeast" up the labor supply curve shows
A) what happens to real wages and employment when aggregate demand expands. B) what happens to real wages and employment when aggregate demand contracts. C) what workers think is happening to real wages if an aggregate demand expansion fools them. D) what firms think is happening to real wages if an aggregate demand expansion fools them.