The Downside of Synergy in a Diversified Firm Is

question 36

Multiple Choice

The downside of synergy in a diversified firm is:

• A) increasing independence of businesses.
• B) the reduction of activity sharing.
• C) excessive focus on risky innovation.
• D) the loss of flexibility.

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Definitions:

Work and Leisure

Describes the balance between the time and effort spent in gainful employment and the time spent in recreational activities or rest.

Second Best

Refers to a situation wherein the optimal condition cannot be achieved, and the best possible alternative under the given restrictions is adopted.

Previously Existing Distortions

Inefficiencies or imperfections already present in a market before a new policy or change was implemented.

Distortionary Tax

A tax that causes people to alter their behavior and economic decisions from what they would have chosen in the absence of the tax.