Which of the Following Is Least Likely to Increase the Overall

question 7

Multiple Choice

Which of the following is least likely to increase the overall risk of a company?

• A) increased sales variability
• B) increased debt levels
• C) increased variable costs while decreasing fixed costs
• D) increased interest rates

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Definitions:

Managerial Bureaucracy

A type of organizational structure that is characterized by a formal division of responsibilities, a clear hierarchy, and a detailed set of rules and procedures.

Long-run Average Cost

The per-unit production cost when all factors of production, including capital, are variable, and the scale of production can be changed.

Output Units

Quantitative measures representing the amount of goods or services produced by a company or an economic system.

Constant Returns to Scale

A situation where increasing all inputs by the same proportion results in output increasing by that same proportion, indicating linear scalability of production processes.