According to the rank-size rule, which of the following is typically true of higher-order services, such as hospitals with a large number of medical specialties? They are located in suburbs.

They are located in small towns.

They have smaller ranges and thresholds.

They have larger ranges and thresholds.

They have larger ranges and thresholds.

Explanation: The rank-size rule defines range as the longest distance that a customer will travel to purchase a good or service. Threshold is the minimum market needed to support the supply of a product or service. It is assumed that customers which travel longer distances to purchase a higher-order good or service, and a provider of such goods and services will require a larger customer base to make a profit. Thus, higher-order services have larger ranges and thresholds.