Which term describes a diversified business that operates in multiple industries?

• A. diversification
• B. economies of scale
• C. external growth
• D. conglomerates

Answer: (D)

A conglomerate is a company that owns a portfolio of businesses in several different industries. This describes a diversified business that operates in multiple sectors under one parent, spreading risk across varied activities. Such diversification often comes from external growth, through acquisitions that bring in new, unrelated businesses. Economies of scale are about cost savings from higher output, not about operating in multiple industries. Diversification as a strategy refers to entering new products or markets, which can be related or unrelated, but it doesn’t by itself name the corporate structure. Therefore, conglomerate best fits a diversified business operating in multiple industries.