The economy consists of producers, who make and sell goods and services, and consumers, who buy the goods and services.
Producers rely on consumers to buy from them, and consumers rely on producers to provide the goods and services they want.
Money allows this relationship to work.
The economic uncertainty in the U.S. market and the customers' preferences.
Answer:
the firm's demand for labour is elastic. the total wage bill decreased even though wage rates have increased. this indicates that the firm's demand for labour is sensitive to wages. As a result of the rise in wages, the demand for labour by the firm fell more than the rise in price. This indicates that demand is elastic
Explanation:
Answer:
Option A. There exist economies of scope between diversified business units
Explanation:
The reason is that diversification is lowering the industry risk of the business the company is in by investing in several other industries. This helps us to lower the risk and have a steady returns in the subsequent years. This means uncertainty related to cash flows is lowered and this has also increased the chances of cash surplus for subsequent years.
Furthermore, if the investments made in diversified business units possesses economies of scope, which means that we are in related diversification because we are manufacturing different but similar goods which are substitutes to each other from large to some extent. This brings economies of scope and would lower the total operating cost of company. Hence the <u>Option A</u> which says that economies of scope does add value to the company is the right option.
Option B is not preferable option as the option of investing in different businesses is choosen in the option A.
Option C is again the same as Option B and the difference is that it uses the word several unrelated businesses instead of comprehensive business portfolio which is the same thing. Hence <u>Option C</u> is also not preferable option here.
<u>Option D</u> is incorrect because when we acquire an organization it is the move of increase in risk portfolio because acquisitions are mostly not a sound investments and not a part of diversification strategy as the company is putting all the eggs in the single basket.
