Word-Of-Mouth Communication Is Powerful Because We Tend to Have Confidence

question 45

Multiple Choice

Word-of-mouth communication is powerful because we tend to have confidence that the opinions of friends or relatives are more reflective of the majority than they may be.This is an example of

• A) size distortion.
• B) the extrapolation bias.
• C) the infrequency bias.
• D) sample error.
• E) the law of small numbers.

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Definitions:

Escalator Clause

A contract provision allowing for an increase in prices or costs under specific conditions.

Contract

A legal agreement between two or more parties that outlines obligations and rights.

Break-Even Analysis

A calculation used to determine when a business or project will be able to cover all its expenses and begin making a profit.

Fixed Costs

Costs that remain constant and do not vary based on the number of units produced or sold.