As an Organization Grows and Begins to Produce a Wider

question 28

True/False

As an organization grows and begins to produce a wider range of products,a functional structure becomes more efficient and effective.

---

Definitions:

Average Total Cost

The cost for each unit produced, found by taking the total cost of producing goods and dividing it by the output quantity.

Production Function

An equation that describes the maximum amount of output that can be derived from a set number of inputs.

Diminishing Marginal Product

The principle that says the marginal product of a factor of production decreases as the quantity of the factor is increased, holding all else constant.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the scale of production and the cost per unit of production decrease.