Refuge Nursing Homes, Inc

question 21

Multiple Choice

Refuge Nursing Homes, Inc., (RNH) has been highly profitable in the past 10 years, providing its investors returns in excess of direct competitors. RNH has a reputation for providing high-paying managerial and hourly-employee jobs. However, recent investigations have revealed that the nursing home residents have been provided substandard care, including non-nutritious and unappetizing meals, non-functional medical equipment, and inadequate patient-care staffing. Which statement best describes the situation?

• A) RNH has been earning below-average returns, so it has had to prioritize the demands of its various stakeholders.
• B) RNH has prioritized the demands of capital market stakeholders over the demands of product market stakeholders.
• C) RNH has earned above-average returns and so has satisfied the needs of all relevant stakeholders.
• D) RNH has been attempting to minimally satisfy the demands of all of its stakeholders.

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Definitions:

Hypercompetition

An environment characterized by intense and rapid competitive moves, where advantages are quickly eroded.

Oligopoly

A market structure characterized by a small number of firms dominating the market, leading to limited competition.

Monopoly

A market structure characterized by a single seller dominating the entire market for a particular good or service.