Question
Your company manufactures children's toys, and you want to keep the prices as low as possible for individual consumers. Which of the following things could you do to keep prices low?
A.
Add subcontractors to the manufacturing process.
B.
Hire tradespeople.
C.
Keep the distribution chain short.
D.
Add companies to the distribution chain.
A.
Add subcontractors to the manufacturing process.
B.
Hire tradespeople.
C.
Keep the distribution chain short.
D.
Add companies to the distribution chain.
Answers
Answer
A company is usually unable to take advantage of economies of scale during the __________ stage of the product life cycle.
A.
Saturation
B.
Introduction
C.
Growth
D.
Maturity
A.
Saturation
B.
Introduction
C.
Growth
D.
Maturity
Answer
Which of the following business ownership structures offers the best liability protection but higher taxes?
A.
A nonprofit corporation
B.
A C corporation
C.
A partnership
D.
A sole proprietorship
A.
A nonprofit corporation
B.
A C corporation
C.
A partnership
D.
A sole proprietorship
Answer
Eggs, toilet paper, and candy bars are examples of __________.
A.
Specialty goods
B.
Convenience goods
C.
Shopping goods
D.
Unsought goods
A.
Specialty goods
B.
Convenience goods
C.
Shopping goods
D.
Unsought goods
Answer
What does a company's customer service department do?
A.
Promote the company to new groups of potential customers.
B.
Interact with customers after they have purchased the product.
C.
Receive payments from customers and handle the company's money.
D.
Handle employee-related procedures.
A.
Promote the company to new groups of potential customers.
B.
Interact with customers after they have purchased the product.
C.
Receive payments from customers and handle the company's money.
D.
Handle employee-related procedures.
Answer
Which of the following describes a saturated market?
A.
The prices of competitors are very high.
B.
Many people want this product and haven't purchased it yet.
C.
Most potential buyers have not heard of the product and don't know it exists.
D.
Most potential buyers already have a product that satisfies this need or want.
A.
The prices of competitors are very high.
B.
Many people want this product and haven't purchased it yet.
C.
Most potential buyers have not heard of the product and don't know it exists.
D.
Most potential buyers already have a product that satisfies this need or want.
Answered by
GPT-4o mini
To keep prices low for individual consumers, the best option from the provided choices would be:
**C. Keep the distribution chain short.**
A shorter distribution chain typically reduces costs associated with transportation, handling, and intermediaries, which can help maintain lower prices for consumers.
The other options are less advantageous for keeping prices low:
- **A. Add subcontractors to the manufacturing process.** This could potentially increase costs if not managed properly, as more parties are involved.
- **B. Hire tradespeople.** While skilled labor can improve quality, it may not necessarily help in keeping costs low, depending on wages and benefits.
- **D. Add companies to the distribution chain.** This would likely increase costs due to more intermediaries, making it less effective for keeping prices low.
Therefore, option C is the most effective choice for maintaining lower prices for consumers.
**C. Keep the distribution chain short.**
A shorter distribution chain typically reduces costs associated with transportation, handling, and intermediaries, which can help maintain lower prices for consumers.
The other options are less advantageous for keeping prices low:
- **A. Add subcontractors to the manufacturing process.** This could potentially increase costs if not managed properly, as more parties are involved.
- **B. Hire tradespeople.** While skilled labor can improve quality, it may not necessarily help in keeping costs low, depending on wages and benefits.
- **D. Add companies to the distribution chain.** This would likely increase costs due to more intermediaries, making it less effective for keeping prices low.
Therefore, option C is the most effective choice for maintaining lower prices for consumers.
Answered by
GPT-4o mini
A company is usually unable to take advantage of economies of scale during the **B. Introduction** stage of the product life cycle.
During the introduction stage, a product is newly launched, and production volumes are typically low as the company is still trying to establish the product in the market. Because of this low production volume, the company is less able to reduce costs per unit through economies of scale compared to later stages such as growth, maturity, or saturation.
During the introduction stage, a product is newly launched, and production volumes are typically low as the company is still trying to establish the product in the market. Because of this low production volume, the company is less able to reduce costs per unit through economies of scale compared to later stages such as growth, maturity, or saturation.
Answered by
GPT-4o mini
The business ownership structure that offers the best liability protection but may result in higher taxes is **B. A C corporation**.
**Explanation:**
- **A C corporation** provides limited liability protection to its owners (shareholders), meaning their personal assets are protected from the corporation's debts and liabilities. However, C corporations are subject to double taxation: the corporation pays taxes on its profits, and shareholders pay taxes on dividends received.
- **A nonprofit corporation** also provides liability protection, but it generally does not pay taxes on income related to its nonprofit activities, making it a different context compared to profit-seeking entities.
- **A partnership** and **a sole proprietorship** do not offer the same level of liability protection. In a partnership, partners typically share liability, and in a sole proprietorship, the owner is personally liable for all business debts.
Therefore, the C corporation is the best option in terms of liability protection combined with the potential for higher tax liability.
**Explanation:**
- **A C corporation** provides limited liability protection to its owners (shareholders), meaning their personal assets are protected from the corporation's debts and liabilities. However, C corporations are subject to double taxation: the corporation pays taxes on its profits, and shareholders pay taxes on dividends received.
- **A nonprofit corporation** also provides liability protection, but it generally does not pay taxes on income related to its nonprofit activities, making it a different context compared to profit-seeking entities.
- **A partnership** and **a sole proprietorship** do not offer the same level of liability protection. In a partnership, partners typically share liability, and in a sole proprietorship, the owner is personally liable for all business debts.
Therefore, the C corporation is the best option in terms of liability protection combined with the potential for higher tax liability.
Answered by
GPT-4o mini
Eggs, toilet paper, and candy bars are examples of **B. Convenience goods**.
**Explanation:**
- **Convenience goods** are products that are bought frequently, easily, and with minimal effort by consumers. They are typically low-cost items that require little thought before purchase, which aligns well with eggs, toilet paper, and candy bars.
- **Specialty goods** are items with unique characteristics or brand identification for which consumers are willing to make a special effort to purchase.
- **Shopping goods** are products that consumers compare on attributes such as quality, price, and style before making a purchase decision, which is not typically the case for eggs, toilet paper, and candy bars.
- **Unsought goods** are those that consumers do not think about or are not actively seeking out, often including items like life insurance or funeral services.
Thus, the correct answer is B. Convenience goods.
**Explanation:**
- **Convenience goods** are products that are bought frequently, easily, and with minimal effort by consumers. They are typically low-cost items that require little thought before purchase, which aligns well with eggs, toilet paper, and candy bars.
- **Specialty goods** are items with unique characteristics or brand identification for which consumers are willing to make a special effort to purchase.
- **Shopping goods** are products that consumers compare on attributes such as quality, price, and style before making a purchase decision, which is not typically the case for eggs, toilet paper, and candy bars.
- **Unsought goods** are those that consumers do not think about or are not actively seeking out, often including items like life insurance or funeral services.
Thus, the correct answer is B. Convenience goods.
Answered by
GPT-4o mini
The primary role of a company's customer service department is to **B. Interact with customers after they have purchased the product**.
**Explanation:**
- Customer service typically involves assisting customers with inquiries, resolving issues, providing support for product use, and ensuring customer satisfaction after the sale. This interaction can be crucial in building customer loyalty and addressing any problems that may arise.
The other options do not accurately describe the primary functions of a customer service department:
- **A. Promote the company to new groups of potential customers** is more related to marketing and sales departments.
- **C. Receive payments from customers and handle the company's money** is typically managed by the accounting or finance department.
- **D. Handle employee-related procedures** falls under human resources.
Therefore, the correct answer is **B. Interact with customers after they have purchased the product**.
**Explanation:**
- Customer service typically involves assisting customers with inquiries, resolving issues, providing support for product use, and ensuring customer satisfaction after the sale. This interaction can be crucial in building customer loyalty and addressing any problems that may arise.
The other options do not accurately describe the primary functions of a customer service department:
- **A. Promote the company to new groups of potential customers** is more related to marketing and sales departments.
- **C. Receive payments from customers and handle the company's money** is typically managed by the accounting or finance department.
- **D. Handle employee-related procedures** falls under human resources.
Therefore, the correct answer is **B. Interact with customers after they have purchased the product**.
Answered by
GPT-4o mini
The option that best describes a saturated market is **D. Most potential buyers already have a product that satisfies this need or want.**
**Explanation:**
- A saturated market occurs when the volume of a product in the market has reached its maximum potential. In such a market, most consumers who desire the product already own it or have access to sufficient alternatives that meet their needs. Consequently, it becomes challenging for new entrants or existing firms to grow their market share without taking it away from competitors.
The other options do not accurately reflect a saturated market:
- **A. The prices of competitors are very high.** This does not necessarily indicate saturation; prices can vary for various reasons.
- **B. Many people want this product and haven't purchased it yet.** This suggests potential growth opportunities rather than saturation.
- **C. Most potential buyers have not heard of the product and don't know it exists.** This indicates a lack of market awareness rather than saturation.
Therefore, the correct answer is **D. Most potential buyers already have a product that satisfies this need or want.**
**Explanation:**
- A saturated market occurs when the volume of a product in the market has reached its maximum potential. In such a market, most consumers who desire the product already own it or have access to sufficient alternatives that meet their needs. Consequently, it becomes challenging for new entrants or existing firms to grow their market share without taking it away from competitors.
The other options do not accurately reflect a saturated market:
- **A. The prices of competitors are very high.** This does not necessarily indicate saturation; prices can vary for various reasons.
- **B. Many people want this product and haven't purchased it yet.** This suggests potential growth opportunities rather than saturation.
- **C. Most potential buyers have not heard of the product and don't know it exists.** This indicates a lack of market awareness rather than saturation.
Therefore, the correct answer is **D. Most potential buyers already have a product that satisfies this need or want.**
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