Portfolio Models

question 79

Multiple Choice

Portfolio models

• A) provide a long-term time perspective for analyzing the organization's external environment.
• B) examine the competitive position of an organization's principal rivals.
• C) classify SBUs to determine the future cash contribution that can be expected from each of them.
• D) are not effective in situations where management must make resource allocation decisions across product lines.

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Definitions:

Total Surplus

The sum of consumer surplus and producer surplus; a measure of the total benefit to society from a market transaction.

Consumer Surplus

The differential between consumers’ readiness to pay a certain amount for a service or good and the payment completed.

Equilibrium

The condition in a market where the quantity demanded equals the quantity supplied, leading to no inherent force for price change.

Property Rights

Legal rights to possess, use, and dispose of assets, including real estate, intellectual property, or physical goods, crucial for the functioning of markets and economies.