Adam Wants to Buy a Washing Machine and Is Looking

question 146

Multiple Choice

Adam wants to buy a washing machine and is looking for something that is not too expensive. When he goes to make the purchase, he finds there are two options that meet his requirements. One is a Maytag product, while the other is a newly imported South Korean brand. Adam is not very familiar with the latter and does not hesitate in choosing Maytag. This example implies that ________.

• A) the imported brand will not survive the competition from Maytag
• B) Maytag has a positive customer brand equity
• C) the South Korean company has a low advertising budget
• D) the imported brand is unreliable
• E) the Maytag washing machine has better features than the imported brand

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Definitions:

Market Structures

The organizational and other characteristics of a market, including the number and size of firms, extent of competition, and type of product differentiation, impacting the behaviour and profitability of businesses within the market.

Quantity Effect

The change in total revenue resulting from a unit change in quantity sold, while holding price constant.

Price Effect

Describes how changes in prices impact the quantity supplied and demanded in a market.

Downward-Sloping Demand

A market condition reflected in a demand curve where the quantity demanded of a good decreases as the price of that good increases, and vice versa.