Which Type of Organization Would Be Most Effective for a Small

question 50

Multiple Choice

Which type of organization would be most effective for a small owner/manager-operated business?

• A)Decentralized
• B)Centralized
• C)Matrix
• D)Segmented

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Definitions:

Economies of Scale

The economic benefits that businesses gain from their size of operations, where the expense per unit of production typically lowers as the scale increases.

Increasing Returns

A situation in which an increase in the scale of production results in a disproportionate increase in output, usually leading to lower average costs.

Suffer Losses

occurs when a business or individual incurs expenses that exceed their revenues.

Long-run

A period of time in economics during which all factors of production and costs are variable, allowing for full industry adjustment.