A large firm in the fireworks industry employs 250 people, of which 36 are upper-level managers. As a result of this employee to manager ratio, the firm experiences 14.4% reduced productivity. At the same time, a small firm with 65 employees and 6 upper-level managers experiences 9.2% reduced productivity.

If everything else is constant, what can we say about the cost structure in this industry over this range of production?
 

Answer rating: 100% (QA)

Solution Explanation It is clear that the firm has a cost disadvantage i... View the full answer