The Main Difference Between the Related Constrained Level of Diversification

question 82

Multiple Choice

The main difference between the related constrained level of diversification and the related linked level of diversification is:

• A) the percentage of total organizational profitability that comes from the dominant business.
• B) the level of resources and activities shared among the businesses.
• C) whether the diversification is vertical or horizontal.
• D) whether the diversification is value-creating or value-neutral.

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Definitions:

Per-unit Costs

Refer to the average cost for each unit of a product or service that is produced, including all relevant expenses.

Marginal Costs

The additional cost incurred by producing one more unit of a good or service.

Fixed Costs

Costs that do not change with the level of output or sales, such as rent, salaries, and insurance, remaining constant regardless of business activity levels.

Marginal Product

The increase in output that results from employing one more unit of a particular input, holding all other inputs constant.