The Problems That May Arise Due to the Separation of Ownership

question 47

Multiple Choice

The problems that may arise due to the separation of ownership and management in large business organizations is know as:

• A) separation anxiety.
• B) the agency problem.
• C) corporate disconnect theory.
• D) none of the above

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Definitions:

Marginal Cost

The cost added by producing one additional unit of a product or service, a crucial concept for decision-making in business and economics.

Variable Costs

Costs that vary directly with the level of production or output, such as raw materials and labour costs.

Variable Costs

Costs that change in proportion to the level of output or business activity, such as materials and labor directly involved in production.

Advertising Costs

Expenses incurred in promoting a product, service, or brand to potential customers.