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.
Correct Answer:
Verified
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