Scenario - Vaughn Bately

question 1

Multiple Choice

Scenario - Vaughn Bately
Vaughn Bately manages a group of eight electrical engineers at Defiance Designs. His team is highly trained and well respected by experts both inside and outside the company. Recently one of Vaughn's engineers suggested a new technique for the development and use of an argon laser. There appeared to be rich potential for this technology, but Vaughn wasn't certain that developing this technology was the best use of his limited resources. Vaughn was facing a significant decision.
-If Vaughn uses the administrative model of decision making, which of these assumptions would he reject?

• A) Decision-makers settle for a satisficing rather than maximizing solution.
• B) The search for alternatives is limited because of information, human and resource constraints.
• C) Rational procedures will normally lead to the best solution in a complex organization.
• D) Decision objectives are often vague, conflicting, and lack consensus among managers.
• E) All of these are accepted.

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Definitions:

Average Total Cost

Total cost divided by quantity of output produced. Also referred to as average cost.

Marginal Decision Rule

A strategy in economics where decisions are made based on the additional benefits and costs of a small change in the production or consumption.

MC < MR

A condition where marginal cost is less than marginal revenue, suggesting that increasing production can lead to higher profits.

Monopolistic Competition

A commercial structure with several businesses marketing similar yet distinct products, which gives them a bit of power within the market.