Question

when comparing two companies, a conventional company facing diminishing returns and a high-tech company with low marginal costs, if both companies sell the same quantity at the same price, the conventional company will make more profit because it has lower average costs than the high-tech company. true false

Answer 1

The above statement is False.

What is a conventional company?

They are a "traditional" organization, like most others created more than 20 years ago. As a traditional company, its business plan has stayed essentially unchanged since their inception. They value dependability above flexibility and, as a result, administration over leadership.

When comparing two firms, a traditional company experiencing decreasing returns and a high-tech business with low marginal costs.

If both companies sell the same amount at the same price, the conventional company will not generate more profit since the high-tech company has lower average expenses. Therefore, it can be concluded that the above statement is false.

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