A Business Unit That Usually Generates More Than It Needs

question 24

Multiple Choice

A business unit that usually generates more than it needs to maintain its market share is called a(n) _____ in a portfolio model.

• A) star
• B) cash cow
• C) problem child
• D) dog
• E) independent

Explain the impact of economies and diseconomies of scale on firm's cost structures.

Understand the factors contributing to diseconomies of scale within large management structures.

Explain the conditions under which firms experience economies of scale.

Understand the shift in cost curves due to government taxes on producers.

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Definitions:

External Environment

The outside factors and influences that affect an organization's decision-making process and performance, including economic, social, political, and technological factors.

Purchase Decision Process

The five stages a buyer passes through in making choices about which products and services to buy; includes problem recognition, information search, alternative evaluation, purchase decision, and postpurchase behavior.

Buyer

An individual or organization that purchases goods or services for personal use or for further processing or for resale.

Services

Intangible offerings provided by businesses or individuals that involve a performance or action to satisfy the needs of a customer or client.