In Some Industries, Like Insurance, Both Small and Very Large

question 63

Multiple Choice

In some industries, like insurance, both small and very large firms coexist and compete quite effectively in the market. This indicates that the long-run average total cost curve in these industries

• A) is "U" shaped.
• B) is downward sloping over all levels of output.
• C) exhibits constant returns to scale over a wide range of output.
• D) exhibits diseconomies of scale beginning at a low rate of output.

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Definitions:

Personal Power

The influence and authority an individual possesses internally, derived from personal attributes or expertise, rather than a formal position.

Reward Power

The extent to which a manager can use extrinsic and intrinsic rewards to control other people.

Coercive Power

The ability to control others through the fear of punishment or the promise of sanctions.

Conformity

The act of matching attitudes, beliefs, and behaviors to group norms or societal standards.