The "Death-Spiral" Effect Refers To

question 71

Multiple Choice

The "death-spiral" effect refers to:

• A) The allocation of fixed overhead costs over time to an increasing volume of output.
• B) A possible consequence when variable, not full, costing is used.
• C) A likely consequence when fixed overhead allocation rates are based on practical capacity.
• D) The continual raising of prices, in response to decreases in sales volume, in an attempt to recover fixed costs.
• E) Increases in product demand over time in response to increases in fixed promotional costs.

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Definitions:

Genetic Drift

A mechanism of evolution that causes changes in allele frequencies in a population due to random sampling effects, particularly in small populations.

Bureaucracy

A rational and efficient form of organisation founded on logic, order and legitimate authority.

Division of Labour

The practice of dividing work into distinct tasks or roles, specialized by individuals or groups, to increase efficiency and productivity.

Hierarchy of Authority

The ordered arrangement of individuals within an organization according to their levels of power or authority, usually from the highest to the lowest rank.