Final answer:
Managers need to pay attention to costs for organizational effectiveness, but severe cost cutting may not always be the best approach. Different measures of costs offer different insights for firms. Consider the impact of cost cutting on business operations and sustainability.
Step-by-step explanation:
All managers need to pay attention to costs in order to improve organizational effectiveness, but severe cost cutting may not always be the best approach. It is important for managers to consider various measures of costs such as fixed cost, marginal cost, average total cost, and average variable cost. These different statistics provide insights into different aspects of a firm's financial situation. For example, an increase in education of employees or improvement in technology may lead to falling average total costs in certain industries. However, it is also important to consider the potential impact of cost cutting on overall business operations and long-term sustainability.