If a Company Wants to Increase Its Profitability, They Need

question 65

Multiple Choice

If a company wants to increase its profitability, they need to sales volume, prices, or costs.

• A) increase, change, decrease
• B) decrease, change, increase
• C) change, decrease, increase
• D) decrease, increase, change

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Definitions:

Adverse Selection

A situation where asymmetric information leads to the selection of undesirable risks by one party in a transaction, often seen in insurance and financial markets.

Moral Hazard

When a party whose actions are unobserved can affect the probability or magnitude of a payment associated with an event.

Asymmetric Information

Asymmetric information exists when one party in a transaction has more or better information than the other, potentially leading to an imbalance in power or unfair outcomes.

Standardization

The process of making something conform to a standard, typically to facilitate compatibility and interoperability among multiple items or systems.