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 the: A) horizontal distance between benefits and costs is greatest. B) vertical distance between benefits and costs is greatest. C) sum of the squares of the distance between benefits and costs is minimized. D) level of benefits is greatest.

Question

Quizplus · Accepted Answer

The optimal level of decentralization occurs where the vertical distance between benefits and costs is greatest, as this represents the maximum net benefit.

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