Last Year Your Performance Was Not Very Good and Your

question 8

Multiple Choice

Last year your performance was not very good and your performance rating was below average, but this year you have done very well by exceeding your performance goals.To your surprise, your boss gives you just an average performance rating.What error has your boss most likely committed?

• A)Horn error
• B)Halo error
• C)Severity error
• D)Spillover error

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Definitions:

Excess Capacity

A scenario where a firm's actual production is less than its maximum potential output, often leading to inefficiencies and higher costs.

Monopolistically Competitive

Describes a market structure where many firms sell products that are similar but not identical, allowing for competition based on factors other than just price, such as brand and quality.

Demand Curves

Graphical representations that show the relationship between the price of a good or service and the quantity demanded by consumers at various price levels.

Incumbent Firms

Established companies that currently dominate a sector or industry.