Which of the Following Is Not True About Subunits in Decentralized

question 22

Multiple Choice

Which of the following is not true about subunits in decentralized organizations?

• A)Decision-making power resides in individual subunits.
• B)Decision-making power resides in multiple subunits.
• C)Subunits interact by supplying goods to one another.
• D)Subunits interact by supplying services to one another.
• E)When subunits work together,top management uses transfer prices to coordinate the actions of the subunits.

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Definitions:

Marginal Physical Product

The marginal physical product is the change in output resulting from employing one more unit of a particular input, holding other inputs constant.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, leading consumers to replace more expensive items with cheaper alternatives.

Margin

Margin refers to the difference between the selling price of a good or service and its cost of production, also used to describe profit margin or markup.

Total Revenue Product

The total revenue generated by a factor of production, calculated by multiplying the marginal product of the factor by the market price of the output.