What Is Horizontal Differentiation

question 19

Multiple Choice

What is horizontal differentiation?

• A) The mechanisms that enable each subunit to operate independently
• B) The formal division of the organization into subunits
• C) The location of decision-making responsibilities within a structure
• D) The mechanisms for coordinating subunits

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Definitions:

Marginal Cost

The rise in expense associated with the production of an extra unit of a product or service.

Negative Externalities

The cost that affects a party who did not choose to incur that cost, often associated with production or consumption of goods and services, such as pollution.

Underallocated

Refers to a situation where resources are not enough or not effectively distributed for the production of goods and services, leading to inefficiencies.

Cost-Benefit Analysis

A systematic approach to estimating the strengths and weaknesses of alternatives used to determine options that provide the best approach to achieve benefits while preserving savings.