The Primary Reason That an Organization Would Pursue a Diversification

question 30

Multiple Choice

The primary reason that an organization would pursue a diversification strategy is to

• A) decrease operational costs.
• B) better defend itself in a price war.
• C) achieve synergy.
• D) increase customer use.
• E) None of the above is correct.

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Definitions:

Market Price

The current price at which an asset or service can be bought or sold in a marketplace.

User Costs

The costs incurred by the use of a product or service, including wear and tear, opportunity cost of capital, and maintenance.

Extraction Quantity

The amount of natural resources or raw materials removed from the environment for use or sale.

Institutional Intervention

Actions taken by organizations or institutions to address or rectify a particular problem or issue.