Which of the Following Is Not a True Statement About

question 43

Multiple Choice

Which of the following is not a true statement about top-down or bottom-up planning?

• A) Bottom-up plans tend to understate achievable performance.
• B) Top-down plans may fail to achieve "buy in" at lower levels of the organization.
• C) Bottom-up planning has a built-in bias of "ask for more than you need" because managers anticipate having their requests cut during the planning process.
• D) Top-down plans are usually conservative because top management doesn't want to disappoint stockholders by not achieving stated goals.
• E) Top-down "stretch" plans lose their motivational effect if they set goals that are too difficult to achieve.

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Definitions:

Long-Run Total Cost

The cumulative expense incurred by a firm when all inputs are variable, intended to capture the idea of planning and adjustment in the face of changing economic landscapes.

Maximize Profits

A business objective aiming to achieve the highest possible financial gain by managing costs and optimizing revenue streams in a given market environment.

Long-Run Cost Function

A graphical or mathematical representation showing the lowest cost at which a firm can produce any given level of output in the long run, where all inputs are variable.

Positive Output

A situation where the production of goods or services results in a quantity greater than zero.