In Order to Stabilize the Impact of a Runaway Feedback

question 52

True/False

In order to stabilize the impact of a runaway feedback loop, a manager must introduce a balancing loop that continuously seeks the goal of the subsystem.

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Definitions:

Average Costs

A calculation that determines the cost of producing one unit of goods by averaging the total production costs.

Returns to Scale

A concept in economics that describes how the increase in inputs affects the level of output of a production process.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with costs per unit of output generally decreasing with increasing scale.

Diseconomies of Scale

A situation in which a business's costs per unit increase as the scale of operation expands, opposite to economies of scale.