Two Divisions of a Company Decide to Use the Same

question 96

Multiple Choice

Two divisions of a company decide to use the same manufacturing facilities to capitalize on the organization's excess capacity and to reduce the fixed costs assigned by corporate headquarters.This is an example of ________________.

• A) an unrelated diversification strategy
• B) concentration on a single business
• C) international expansion
• D) focused differentiation strategy
• E) synergy

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Definitions:

Compensating Variation

An economic concept describing the amount of additional income that would leave someone as well off after a price change as they were before it.

Price of Earrings

The amount of money required to purchase earrings, which can vary based on materials, brand, and design.

Utility Function

An analytical model that illustrates how buyers prioritize various combinations of products based on the amount of pleasure or utility derived from those combinations.

Consumer's Surplus

The variance between the aggregate sum consumers intend and have the means to pay for a good or service, and the sum they actually pay.