Which of the Following Is Likely If the Distribution Channel

question 1

Multiple Choice

Which of the following is likely if the distribution channel for a product in the foreign country is long?

• A) the foreign country buyers pay a high price
• B) the consumer will pay arms-length price
• C) the profit margin of the sellers increase
• D) the intermediaries are motivated to reship the product to another country to earn higher profits
• E) the seller can increase profit margins by charging a uniform price

---

Definitions:

Net Loss

Occurs when total expenses exceed total revenues during a specific period of time, indicating negative profitability.

Liabilities

Financial obligations or debts owed by a company to others, which must be settled over time by transferring economic benefits.

Expenses

The costs incurred in the process of generating revenue, such as rent, utilities, and salaries.

Revenues

The income generated from normal business operations and includes discounts and deductions for returned merchandise. It serves as the starting point for determining net income.