ernesto wrote:
Can any one pls explain me 1st and 5th questions below?
1. The passage suggests that in order for a manufacturer in a capital-intensive industry to have a decisive advantage over competitors making similar products, the manufacturer must
A. be the first in the industry to build production facilities of theoretically optimal size
B. make every effort to keep fixed and sunk costs as low as possible
C. be one of the first to operate its manufacturing plants at minimum efficient scale
D. produce goods of higher quality than those produced by direct competitors
E. stockpile raw materials at production sites in order to ensure a steady flow of such materials
Here a, b, d gets directly eliminated. I am confused between a and e.
5. The primary purpose of the passage is to
A. point out the importance of intangible capital for realizing economies of scale in manufacturing
B. show that manufacturers frequently gain a competitive advantage from investment in large manufacturing facilities
C. argue that large manufacturing facilities often fail because of inadequate investment in both tangible and intangible capital
D. suggest that most new industries are likely to be dominated by firms that build large manufacturing plants early
E. explain why large manufacturing plants usually do not help manufacturers achieve economies of scale
5th Qn - I am confused between a and e
a - talks about intangible capital importance. Last line of 1st parra says, for potential economies of scale, investment in tangible capital needed and for realized economies of scale, investment in intagible capital needed. So , a becomes part of primary purpose. Pls correct me if i am wrong here.
e - 1st line of 1st para says, manufacturer needs to do more than constructing large sized plants to acheive economies of scale. So, large plans need not necessarily acheive economies of scale. So, why can't e be agreed to?
1. The passage suggests that in order for a manufacturer in a capital-intensive industry to have a decisive advantage over competitors making similar products, the manufacturer must
A. be the first in the industry to build production facilities of theoretically optimal size
B. make every effort to keep fixed and sunk costs as low as possible
C. be one of the first to operate its manufacturing plants at minimum efficient scale
D. produce goods of higher quality than those produced by direct competitors
E. stockpile raw materials at production sites in order to ensure a steady flow of such materials
Here a, b, d gets directly eliminated. I am confused between a and e.
5. The primary purpose of the passage is to
A. point out the importance of intangible capital for realizing economies of scale in manufacturing
B. show that manufacturers frequently gain a competitive advantage from investment in large manufacturing facilities
C. argue that large manufacturing facilities often fail because of inadequate investment in both tangible and intangible capital
D. suggest that most new industries are likely to be dominated by firms that build large manufacturing plants early
E. explain why large manufacturing plants usually do not help manufacturers achieve economies of scale
5th Qn - I am confused between a and e
a - talks about intangible capital importance. Last line of 1st parra says, for potential economies of scale, investment in tangible capital needed and for realized economies of scale, investment in intagible capital needed. So , a becomes part of primary purpose. Pls correct me if i am wrong here.
e - 1st line of 1st para says, manufacturer needs to do more than constructing large sized plants to acheive economies of scale. So, large plans need not necessarily acheive economies of scale. So, why can't e be agreed to?
The main idea of passage is "minimum efficient scale", which is connected to intangible capital in 1st paragraph. In the 2nd paragraph. Told you that you will dominate the industries if you achieved that scale. Competitor must do more to compete with you. (A) properly stated the main idea.
(E), passage does not discussed the reason why manufacturers not achieve their scale. Thus incorrect.