Q1. Illustrate the elements which are required for a successful cost reduction strategy.
Q2. Illustrate four benefits and demerits of cost reduction strategies.
Q3. Describe the idea of BE analysis.
Q4. Illustrate the importance of contribution margin.
Q5. Trace out how can BE output can be expressed in terms of the sales.
Q6. Illustrate the concept and importance of operating leverage.
Q7. If a firm’s long run average cost curve (or LAC) is horizontal, then what can you say regarding the long run marginal curve (LMC)?
Q8. MC cuts AC at its minimum. True or False? Describe.
Q9. If APL is dome-shaped, then the AVC is U shaped. Illustrate.
Q10. Assume that a new car factory had come up in the backward region. What type of positive externalities would you anticipate?