​When Decision Rights Are Decentralized,typically

question 30

Multiple Choice

​When decision rights are decentralized,typically

• A)​decisions are being moved to those with more of the relevant information
• B)decisions are being moved to those with stronger incentives to make good decisions
• C)decisions are being moved from those with more of the relevant information
• D)​decisions are being moved from those with weaker incentives to make good decisions

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Definitions:

Marginal Cost

The additional cost incurred by producing one more unit of a good or service.

Marginal Benefit

The additional benefit derived from producing one more unit of a good or service.

Accounting Profit

The total revenue of a business minus its explicit costs; essentially the net income reported on the financial statements.

Economic Profit

The difference between the total revenue received by a business and the total costs, including both explicit and implicit costs.