Inseparability in Services Means

question 24

Multiple Choice

Inseparability in services means:

• A)consumers see little variation from one service provider in an industry to another.
• B)consumers cannot separate the service from the deliverer of the service.
• C)consumers are unable to differentiate price from quality.
• D)consumers cannot evaluate a service until it is being utilized.

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Definitions:

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the scale of operation and output increases.

Diseconomies of Scale

The phenomenon when a firm experiences increased costs per unit of output due to inefficiencies associated with scale of production, contrary to economies of scale.

Long-run ATC

Referring to the average total cost of production when all inputs, including capital, are variable over a longer period.

Average Fixed Costs

When the production expenses that stay uniform, regardless of production levels, are divided by the number of goods produced.