The Parity Principle States That

question 28

Multiple Choice

The parity principle states that

• A) each employee should have only one boss.
• B) personnel must have equal amounts of authority and responsibility.
• C) authority should flow from one level of management to the next.
• D) power should be concentrated only at the hands of supervisors.

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Definitions:

Cost-plus Pricing

A strategy for setting prices that involves adding a defined markup to the cost of each unit of a product.

Experience-curve Pricing

A pricing strategy that takes into account the reductions in unit costs as cumulative volume increases, due to gained efficiency and experience.

Experience-curve Pricing

A pricing strategy that lowers the cost of a product over time as the production processes become more efficient with experience.

Experience-curve Pricing

A pricing strategy based on the concept that costs decline and efficiency improves over time with accumulated production experience.