A Product Group Structure Enables an Organization to Do All

question 19

Multiple Choice

A product group structure enables an organization to do all of the following except:

• A) gain a low-cost advantage.
• B) achieve economies of scale.
• C) transfer core competences to foreign divisions.
• D) achieve local responsiveness.

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Definitions:

Economic Profits

Profits exceeding the normal return on investment, calculated by subtracting both explicit and implicit costs from total revenues.

Industry Expansion

The process of a sector growing in size, output, or number of entities, often due to increased demand or technological advancements.

Normal Profits

The level of profit necessary to cover the costs of the inputs owned by the firm, acting as the minimum earnings to keep the firm in business.

Competitive Equilibrium

A state in a market where supply equals demand, with no external influences altering the price or quantity.