What Are the Two General Types of Diversification, and When

question 8

Essay

What are the two general types of diversification, and when would one be preferred over the other?

---

Definitions:

Co-Workers

Individuals who work together, often sharing tasks or goals within the same organization.

Economies Of Scale

The cost advantages that enterprises obtain due to their scale of operation, leading to decreased costs per unit.

Network Effects

The phenomenon where the value or utility of a product or service increases as more people use it, often seen in digital and social media platforms.

Consumer Surplus

The difference between the highest price a consumer is willing to pay and the actual market price they pay.