What Is a Unique Challenge of Large Firms

question 6

Multiple Choice

What is a unique challenge of large firms?

• A) Liability of smallness
• B) Limited access to resources
• C) Difficulty ensuring consistency
• D) Lack of legitimacy

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Definitions:

Utility Function

Describes how different combinations of goods or services (or different outcomes) provide levels of satisfaction or utility to an individual.

Substitution Effect

The change in consumption patterns due to changes in the relative prices of goods, leading consumers to substitute more expensive items with cheaper alternatives.

Giffen Good

A product that experiences an increase in demand as its price increases, contrary to the law of demand, typically because it is a staple whose cheaper substitutes are not as affordable.

Inferior Good

A type of good for which demand decreases as the income of the consumer increases, contrary to normal goods.