Which of the Following Would Be Most Effective in a Small

question 5

Multiple Choice

Which of the following would be most effective in a small owner-manager-operated business?

• A) profit centers
• B) centralization
• C) investment centers
• D) cost centers

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Definitions:

Marginal Revenue

The rise in income generated by selling an extra unit of a product or service.

Maximizing Profit

The process of making business decisions that increase a firm's earnings to its highest possible level.

Total Revenue

The total income a business receives from selling its goods or services, calculated by multiplying the price per unit by the number of units sold.

Competitive Firm

A company that operates in a market with many other firms, selling similar or identical products or services, where no single firm can influence market prices.