If D represents the level of decentralization of corporate decision-making, then Benefits = B*D and Costs = A*D + C*D². The optimal level of decentralization occurs where: A) Benefits = Costs B) Costs are equal to zero C) D = BD - Ad - CD² D) D = (B-A)/2C

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The optimal level of decentralization occurs where the marginal benefit equals the marginal cost. Setting the derivative of Benefits (B) equal to the derivative of Costs (A + 2CD) gives D = (B-A)/2C.

If D Represents the Level of Decentralization of Corporate Decision-Making