If D represents the level of decentralization of corporate decision making,and A and C are positive constants,then Benefits = B × D and Costs = A × D + C × D².The optimal level of decentralization occurs where the: A)horizontal distance between the benefits and costs curves is greatest. B)vertical distance between the benefits and costs curves is greatest. C)sum of the squares of the distance between the benefits and costs curves is minimized. D)level of benefits is greatest.

Question

Quizplus · Accepted Answer

The optimal level of decentralization occurs where the vertical distance between the benefits and costs curves is greatest, as this represents the point at which the net benefit (benefits minus costs) of decentralization is maximized.

If D Represents the Level of Decentralization of Corporate Decision