Which of the Following Is a Critical Success Factor for Any

question 87

Multiple Choice

Which of the following is a critical success factor for any business?

• A) being environmentally friendly
• B) meeting and exceeding customer needs
• C) low employee turnover
• D) increase in stock price

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Definitions:

Diminishing Marginal Returns

The principle that as additional units of a factor of production are added, the increase in output will eventually decrease, holding other factors constant.

Constant Returns to Scale

A situation where increasing all inputs by a certain factor results in output increasing by the same factor, indicating proportionate scalability of production.

Increasing Returns to Scale

Occurs when an increase in all inputs by a certain percentage causes a more than proportional increase in output.

Decreasing Returns to Scale

Decreasing returns to scale occur when an increase in all inputs leads to a less than proportional increase in output, showing that the firm becomes less efficient as it scales up production.