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Discuss the Disadvantages of a Decentralized System

question 16

Essay

Discuss the disadvantages of a decentralized system. If you were making a recommendations to the government, what are some of the potential issues of a decentralized system you would identify?


Definitions:

Marginal Cost

The price involved in creating another unit of a good or service.

Break-even Price

The price at which total revenues equals total costs, resulting in neither profit nor loss.

Shut-down Price

The price level at which a business's revenue just covers its variable costs, below which it will cease operations.

Average Variable Cost

The average cost of variable inputs (like labor and materials) per unit of output produced.

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