Which of the Following Is a Limitation of the BCG

question 18

Multiple Choice

Which of the following is a limitation of the BCG matrix?

• A) It doesn't help managers determine which SBUs need investment to grow.
• B) It doesn't help managers determine which SBUs should be dropped from the portfolio.
• C) It focuses on the future of the market rather than current conditions.
• D) It doesn't tell managers the best ways to make growth happen.
• E) It can't be used by corporations with multiple SBUs.

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Definitions:

Market Price

The present cost at which an item or service is available for purchase or sale in a market.

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or service is not achieved or is not achievable.

Equilibrium

A state in a market where the quantity demanded equals the quantity supplied, resulting in a stable market price.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually pay.