Which of the Following Is a Limitation in Using Profitability

question 16

Multiple Choice

Which of the following is a limitation in using profitability as the sole measure of performance?

• A)Profit is linked to diminishing returns to scale and is a misrepresentation of true performance.
• B)Profit is a short-term measure and can be manipulated by taking actions that may prove dysfunctional in the longer term.
• C)Profit produces externalities,which invariably have a negative effect on the environment.
• D)Profits cannot account for the network effects that are generated by multiple users in diverse locations.

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Definitions:

Thermal Vents

Openings in the Earth's surface from which heated geothermal water and gases are released into the ocean, often supporting unique ecosystems.

Hydrogen Sulfide

A colorless, poisonous gas with the characteristic foul odor of rotten eggs, often produced by the decomposition of organic matter.

Tube Worms

Marine invertebrates living in tube-like structures, part of the phylum Annelida or sometimes other groups.

Mean Annual Temperature

The average temperature of a specific location over the course of a year, taking into account all seasonal variations.