Which of the following statements is correct?
A)An auto manufacturer is less capital intensive than a bakery.
B)An accounting firm is more capital intensive than a railroad.
C)An oil refinery is more capital intensive than Starbucks.
D)None of these are correct.

Question

Quizplus · Accepted Answer

Capital intensity refers to the amount of capital required per unit of output. An oil refinery is more capital intensive than Starbucks as it requires significant investment in machinery, equipment, and infrastructure to refine crude oil into various marketable products. On the other hand, Starbucks requires less capital investment in comparison to an oil refinery as it mainly requires investments in stores, equipment, and branding. Option A and B are incorrect as auto manufacturing and accounting firms require significant investments in machinery, equipment, and technology compared to a bakery or railroad, respectively.

Which of the Following Statements Is Correct