Which of the Following Benefits of Diversification Explains the Idea

question 7

Multiple Choice

Which of the following benefits of diversification explains the idea that a multiproduct firm is an efficient choice when the costs of doing business complicate inter-firm coordination?

• A)Use of internal capital markets
• B)Economies of scale and scope
• C)Economizing on transaction costs
• D)Diversifying shareholder portfolios
• E)Identifying undervalued firms

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Definitions:

Eyespots

Pigmented organelles found in certain algae and unicellular organisms that allow them to sense light direction and intensity, aiding in phototaxis.

Light Source

An object that emits light, providing illumination for various applications, ranging from domestic lighting to scientific research.

Light Intensity

The amount of light energy per unit of area, an important factor in the photosynthesis process and plant growth.

Cones

Geometric shapes that have a circular base and a single vertex.