A Strategy of Unrelated Diversification Is

question 68

Multiple Choice

A strategy of unrelated diversification is

• A)always a mistake.
• B)likely to be less risky than related diversification.
• C)not always as unrelated as it may seem e.g. the businesses may share some common attributes which can be exploited.
• D)always the last resort.

Identify and calculate average, marginal, average fixed, and average variable costs.

Determine the impact of external factors such as taxes and technology on opportunity costs.

Analyze the role and importance of sunk costs in economic and business decisions.

Understand the implications of fixed costs in the short and long term.

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Definitions:

Equilibrium Price

The market price at which the quantity of goods supplied is equal to the quantity of goods demanded, achieving market balance.

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the equilibrium price, where demand and supply are equal.

Equilibrium Price

The cost at which the amount of a product or service that consumers want to purchase matches the amount available, leading to equilibrium in the market.

Supply Decreases

A reduction in the amount of a product or service that is available for sale, often resulting in higher prices if demand remains the same.