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A Company Is of the View That What Is Best

question 72

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A company is of the view that what is best for its shareholders may not be best for its employees and the community. It also believes that the most efficient means to achieve increased profits is to close its factory and move production overseas, which is not agreed upon by its shareholders. This is an example of _____.


Definitions:

Diseconomies of Scale

Diseconomies of scale occur when a company or business grows so large that the costs per unit increase, leading to decreased efficiency.

Diminishing Marginal Returns

A principle stating that as additional units of a variable input are added to a fixed input, the additional output produced from each new unit will eventually decrease.

Normal Profit

The minimum level of profit needed for a company to remain competitive in the market, covering its opportunity costs.

Entrepreneur's Potential Earnings

The hypothetical income an entrepreneur could earn, considering the risks and opportunities associated with starting and running a business.

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