Which of the Following Is a Disadvantage of Decentralization

question 2

Multiple Choice

Which of the following is a disadvantage of decentralization?

• A) Decisions made by one manager may negatively affect the profitability of the entire company.
• B) Decentralization helps retain quality managers.
• C) Managers closest to the operations make decisions.
• D) Managers are able to acquire expertise in their areas of responsibility.

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Definitions:

Average Revenue

The amount of income generated per unit of sale, calculated by dividing total revenue by the quantity of goods sold.

Marginal Revenue

The additional income obtained from selling one more unit of a product or service.

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is unachievable.

Socially Efficient

A situation where resources are allocated in a way that maximizes the total benefit to society.