What Are the Three Questions That Managers Can Use to Distinguish

question 13

Essay

What are the three questions that managers can use to distinguish a winning strategy from a so-so or flawed strategy? Briefly explain why each question is important.

Determine the outcomes of changing production scale on average costs.

Recognize the relationship between a firm's operational decisions in the short and long run.

Identify the characteristics of different types of cost curves.

Distinguish between constant, increasing, and decreasing returns to scale.

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Definitions:

Utility

In economics, refers to the total satisfaction received from consuming a good or service.

Satisfaction

The fulfillment or gratification of a desire, need, or appetite.

Green Beans

Edible green pods from certain cultivars of the common bean, often consumed cooked as a vegetable.

Diminishing Marginal Utility

The principle that as a person increases consumption of a product, there is a decline in the additional satisfaction obtained from consuming one more unit.