A Special Form of Planned Retention by Which Part or All

question 41

Multiple Choice

A special form of planned retention by which part or all of a give loss exposure is retained by the firm is called

• A)hedging.
• B)self-insurance.
• C)passive retention.
• D)noninsurance transfer.

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Definitions:

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Economic Efficiency

A state in which resources are optimally allocated to serve each person in the best way while minimizing waste and inefficiency.

Entry Barriers

Obstacles that make it difficult for new competitors to enter a market, including high startup costs, stringent regulations, and established brand loyalty.

Brand Loyalty

A customer's consistent preference for one brand over all others, often reflected in repeated purchases.