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Question
Which of the following is a difference between firms that have high scalability and firms that have low scalability?
a. Firms with high scalability incur extremely low fixed costs, whereas firms with low scalability incur extremely high fixed costs.
b. Firms with high scalability have variable costs as 80 to 85 percent of total costs, whereas firms with low scalability have variable costs as zero to five percent of total costs.
c. Firms with high scalability serve additional customers at extremely low incremental costs, whereas firms with low scalability serve additional customers at high incremental variable costs.
d. Firms with high scalability have a low contribution margin, whereas firms with low scalability have a high contribution margin.
Answer
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