Shared Activities That Can Provide the Basis for Operational Economies

question 18

True/False

Shared activities that can provide the basis for operational economies of scope are quite common among related-constrained and related-linked diversified firms, as well as firms following an unrelated diversification strategy.

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Definitions:

Voluntary

Performed, decided upon, or proceeding from an individual's own choice, without being forced or required to do so.

Consensual

Agreements or actions made with the free and informed consent of all parties involved.

Equity

A system of justice that developed in England separate from the common law courts. Few states in the United States still maintain separate equity courts, though most apply equity principles and procedures when remedies derived from the equity courts are sought. A broader meaning denotes fairness and justice. In business organization law, the capital contributions of owners plus profits that have not been distributed to the owners; stated capital plus capital surplus plus earned surplus.

Partnership Capital

The total resources or assets that partners contribute to a partnership for the purpose of starting or expanding the business.