Which of These Assumptions Are Included in the Classical Model

question 51

Multiple Choice

Which of these assumptions are included in the classical model of decision making?

• A) Problems are unstructured and ill defined.
• B) The decision-maker strives for conditions of certainty.
• C) Criteria for evaluating alternatives are unknown.
• D) The decision-maker selects the alternatives that will minimize the economic return to the organization.
• E) The situation is always uncertain.

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Definitions:

Contribution Margin

The difference between a product's price and the variable costs associated with its production, indicating how much contributes to covering fixed costs and generating profit.

Cash Break-even

The point at which a business generates just enough revenue to cover its operating cash expenses, without generating profit.

Fixed Costs

Fixed costs are expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Output Produced

The total amount of goods and services produced by an entity during a specific period.