Suppose That in 2012 MBI Corp

question 54

Multiple Choice

Suppose that in 2012 MBI Corp. produced 100 million units of a good at an average cost of $6, and in 2013 MBI Corp. expanded its plant capacity and produced 200 million units at an average cost of $6.20. In this range, one can conclude that MBI Corp. is experiencing

• A) economies of scale.
• B) diseconomies of scale.
• C) neither economies of scale or diseconomies of scale.
• D) increasing marginal product.

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Definitions:

Delegation

The act of assigning authority and responsibility to others to carry out specific activities while maintaining accountability for the outcome.

Line of Authority

The hierarchical structure in an organization that outlines reporting relationships and the flow of decision-making power.

Chain of Command

The chain of command is a system in an organization that defines the hierarchical line of authority and communication from top leadership to lower-ranking employees.

Span-of-control

The number of direct reports a manager or supervisor has, influencing the structure and management effectiveness of an organization.