In microservice architecture, how is the application's functionality divided?

The correct choice of dividing an application's functionality in a microservice architecture is by smaller services. This approach allows each part of the application to be built, deployed, and scaled independently, which enhances flexibility and maintainability. Each microservice represents a specific business capability, which enables teams to develop, test, and deploy their services autonomously.

This modularity facilitates the use of different technologies and programming languages for different services, catering to the specific needs of each component without affecting the entire system. In a microservice architecture, individual services communicate with each other through APIs or messaging queues, promoting a clear separation of concerns that can lead to more efficient development cycles and easier troubleshooting.

The other options do not accurately reflect the principles of microservice architecture. For instance, a monolithic structure refers to a single-tiered software application, while interdependencies among components could hinder the advantages of scalability and isolated deployment that microservices provide. Lastly, the idea of a single team managing all aspects contradicts the decentralized development approach fundamental to microservices.