What Risk Arises When Demand Is Operating Between Optimum and Maximum

question 75

Multiple Choice

What risk arises when demand is operating between optimum and maximum capacity?

• A)Service quality may suffer, leading to dissatisfied customers
• B)Customer attitudes may improve when they see how busy the company is
• C)Service may improve above the optimum level, surprising customers
• D)Productive resources may be underused, resulting in low productivity
• E)Customers may perceive the company as unlikely to survive

Understand the concept of market failure and its implications for resource allocation.

Distinguish between private and public goods, including their definitions and examples.

Comprehend the reasons for regulatory measures in markets, specifically in sectors with significant externalities or information asymmetry.

Uncover the rationale and economic impact of licensing in professions with high stakes for consumer welfare.

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Definitions:

Worthless Securities

Financial instruments that have lost all monetary value, often resulting in a total loss for the holder.

Holder in Due Course

A legal term for a person who has acquired a negotiable instrument in good faith and for value, and thus has certain rights to it free from many defenses.

Restrictive Indorsement

A signature on a negotiable instrument, such as a check, that limits how the instrument can be used.

Depositary Banks

Banks that hold securities (such as shares or bonds) in custody for other parties, facilitating securities trades and dividend payments.