38. When a firm is experiencing economies of scope, it implies that A) the total cost of producing two types of product together is less than that of producing the products separately. B) long run average total costs decrease as output is increased. C) the marginal cost of producing one type of output decreases when the output of another good is increased. D) long run average total costs remain constant as output is increased.

Anew firm is developing its business plan. it will require $615,000 of assets, and it projects $450,000 of sales and $355,000 of operating costs for the first year. management is reasonably sure of these numbers because of contracts with its customers and suppliers. it can borrow at a rate of 7.5%, but the bank requires it to have a tie of at least 4.0, and if the tie falls below this level the bank will call in the loan and the firm will go bankrupt. what is the maximum debt ratio the firm can use? (hint: find the maximum dollars of interest, then the debt that produces that interest, and then the related debt ratio.)a. 41.94%b. 44.15%c. 46.47%d. 48.92%e. 51.49%