Functional Structures Tend to Work Best in Relatively Stable Environments

question 97

True/False

Functional structures tend to work best in relatively stable environments where problems are predictable and the demands for change and innovation are limited.

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Definitions:

Economic Profit

The distinction between overall income and all expenses, encompassing both direct and assumed costs.

LRAC Curves

Long-Run Average Cost curves, which show the average cost per unit of output when all inputs, including capital, are variable, illustrating economies or diseconomies of scale.

Long-Run Adjustment

The process by which firms adjust their production capacity and input usage to new market conditions over time, beyond short-term fluctuations.

Returns To Scale

Rate at which output increases as inputs are increased proportionately.