Author Question: The Criminal Records Corporation is operating at its minimum efficient scale, selling 10,000 records ... (Read 136 times)

Lisaclaire · **on:** Jun 30, 2018

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.

Question 2

All of the following are true concerning the flexible exchange rate system except one. Which is the exception?
a. It is the same as a floating exchange rate system.
b. It is a system in which supply and demand determine the exchange rate.
c. Government officials have little direct role in the foreign exchange market.
d. Exchange rates may fluctuate considerably from time to time.
e. Exchange rates are fixed by the central banks of the various countries.