The Divisions Within Each SBU Are Related in Terms of Shared

question 86

True/False

The divisions within each SBU are related in terms of shared products or markets, but the divisions of one SBU have little in common with the divisions of the other SBUs.

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Definitions:

Diminishing Marginal Returns

The principle that as an additional unit of a factor of production is added to a fixed amount of other factors, the increase in output will eventually decrease.

Variable Inputs

Refers to inputs used in production that can be adjusted in the short term to meet changes in output levels, such as labor or raw materials.

Returns To Scale

A concept in economics that describes how a proportionate increase in all inputs affects the level of output.

Variable Cost

A cost that increases when the firm increases its output and decreases when the firm reduces its output.