If the Cost of Producing Two or More Outputs Jointly

question 97

Multiple Choice

If the cost of producing two or more outputs jointly is less than the cost of producing the outputs separately, _____.

• A) economies of scope are said to exist
• B) the firm's managers would not want to allow portfolio diversification
• C) economies of scale are said to exist
• D) the firm's shareholders would not want to allow portfolio diversification

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Definitions:

Organic Structure

Is a flexible, decentralized organizational structure with less formal procedures, open communication channels, and a focus on adaptability and teamwork.

Decentralized Decision

A management strategy where decision-making powers are distributed among various levels of the organization rather than being concentrated at the top.

Narrow Span

a management structure where a supervisor oversees a small number of subordinates, allowing for close supervision and control.

Organizational Complexity

relates to the various interconnected components within an organization, including its structure, processes, and dynamics that determine its level of intricacy.