Which of the Following Best Illustrates Diversification

question 81

Multiple Choice

Which of the following best illustrates diversification?

• A)A company that produces many different products decides to produce fewer.
• B)After selling stock, corporate management spends funds on projects with greater risks than shareholders had anticipated.
• C)Instead of holding only the stocks of companies engaged in the banking business, a person decides to hold stock in a number of different companies producing different goods and services.
• D)A person decides to purchase only stocks that have paid high dividends in the past.

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Definitions:

Average Variable Cost

Average variable cost is the total variable cost of production divided by the number of units produced, indicating the variable cost per unit.

Average Variable Cost

The total variable costs (costs that change with production volume) divided by the number of units produced.

Average Product of Labor

The output produced, on average, by one unit of labor, such as one worker or one hour of work.