What term describes the situation where a firm does exceedingly well due to good luck or exceedingly poorly due to bad luck,but returns to normal performance following?
A)Regression to the mean
B)Competitive advantage
C)Persistent performer
D)Sustainable firm
E)Predictable performance

Question

Quizplus · Accepted Answer

Regression to the mean refers to the phenomenon where an extreme event or performance is likely to return to its average or normal performance over time. This can happen due to luck or chance factors, such as winning a lottery or losing a key customer. In business, firms that experience exceptional success or failure due to luck or temporary factors are likely to regress to their average performance level. Therefore, A) Regression to the mean is the best choice to describe the situation where a firm does exceedingly well due to good luck or exceedingly poorly due to bad luck, but returns to normal performance following.

What Term Describes the Situation Where a Firm Does Exceedingly