Question : Which of the following statement is incorrect for factors affecting requirement of fixed capital?
Option 1: The natural business determines the amount of fixed capital to a large extent.
Option 2: Firms which operate at small scale required large amount of fixed capital.
Option 3: Production techniques adopted by Business influence the requirement of fixed capital.
Option 4: None of the above
Correct Answer:
Firms which operate at small scale required large amount of fixed capital.
Solution : Firms which operator large scale required large amount of fixed capital as they need heavy and bigger machinery and equipments. However firms operating at small scale need relatively lesser fixed capital.
Hence option B is correct.
