Smaller auto firms such as Studebaker were unable to survive after World War II because
A) of Japanese competition.
B) of antitrust actions by the U.S. Department of Justice.
C) the reliability and durability of their cars were unsatisfactory.
D) they were not able to achieve a scale of production that would lower unit costs.
E) they were organized as proprietorships rather than corporations.

Question

Quizplus · Accepted Answer

Smaller auto firms such as Studebaker were unable to survive after World War II primarily because they were not able to achieve a scale of production that would lower unit costs. As a result, they were unable to compete with larger firms such as General Motors and Ford who could produce cars at a lower cost. Japanese competition did not become a major factor in the auto industry until the 1970s and antitrust actions were not a significant cause of Studebaker's failure. The reliability and durability of their cars were not necessarily unsatisfactory and their organizational structure as proprietorships instead of corporations was not a major issue either.

Smaller Auto Firms Such as Studebaker Were Unable to Survive