If a firm with two large plants installs a large, custom built assembly line in each of its plants, the custom assembly line is an example of ______.
A)managerial diseconomies
B)geographic variation
C)a compensating wage differential
D)specialized capital

Question

Quizplus · Accepted Answer

The custom built assembly line is an example of specialized capital, as it is a specific type of capital built for a specific purpose in a specific location. The other options do not apply to this scenario. Managerial diseconomies refer to increasing costs due to inefficient management, geographic variation refers to differences in economic conditions between different regions, and a compensating wage differential refers to differences in wages due to differing working conditions.

If a Firm with Two Large Plants Installs a Large