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In a multi-divisional firm, what are the two fundamental (and related) problems with the internal capital allocation process?
Optimal Quantity
The amount of a good or service that maximizes a consumer's satisfaction or a producer's profit given certain constraints and objectives.
Consumers
Individuals or organizations that use economic goods and services produced within an economy.
Firms
Business entities or organizations that produce goods or provide services with the aim of making a profit, often operating within specific industries or markets.
Economic Theory
A set of principles and models that explains how economies operate and how economic agents interact.
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