The Criminal Records Corporation is operating at its minimum efficient scale, selling 10,000 records per month via late-night cable TV advertising. It currently buys pressed records from Hole-in-the-Middle, Inc, which has a minimum efficient scale of 100,000 records per month. Which of the following should Criminal Records do?
a. Continue to buy 10,000 records from Hole-in-the-Middle, which can make the records more cheaply.
b. Buy 100,000 records from Hole-in-the-Middle, so that company can reach its minimum efficient scale too.
c. Buy Hole-in-the-Middle and use its facilities to manufacture the 10,000 records it needs.
d. Buy Hole-in-the-Middle and stop operating as Criminal Records because Hole-in-the-Middle is the more efficient business.
e. Buy Hole-in-the-Middle and stop operating as Criminal Records because Hole-in-the-Middle is the larger business.
A
You might also like to view...
The people who immediately benefit from a minimum wage are
A) employers who now pay the minimum wage. B) those people who enter the labor force to search for minimum wage jobs. C) the workers who retain their jobs after enactment of the minimum wage. D) everyone, both demanders and suppliers, because the minimum wage benefits everyone. E) all workers.
In the long run, a firm can vary
A) its capital but not its labor. B) its labor but not its capital. C) both its labor and its capital. D) neither its labor nor its capital.