Is It Always Worthwhile Gathering More Information About Customer Needs

question 12

Multiple Choice

Is it always worthwhile gathering more information about customer needs and preferences?

• A)Yes,the cost of gathering information is always negligible.
• B)Yes,provided that this information is relevant to the firm's decisions.
• C)No,a good rule of thumb is not to spend on information more than 2% of what is at stake in the decision.
• D)No,the value of additional information must be compared to its additional cost.
• E)Yes,gathering more information enables the concerned firm to forecast the demand for its product more accurately.

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Definitions:

Billion

A number equivalent to one thousand million (1,000,000,000) or, in some number systems, a million million (1,000,000,000,000).

Saving

The portion of income not spent on current consumption but set aside for future use, often in a deposit account or as an investment.

Disposable Income

The sum of funds a family can use for expenditures and savings once income taxes are deducted.

APC

Average Propensity to Consume (APC) is a measure of the fraction of income spent on consumption rather than saving in an economy.