Which of the Following Applications Is Appropriate for Using Factor

question 35

Multiple Choice

Which of the following applications is appropriate for using factor analysis?

• A)to understand the media consumption habits of the target market
• B)to determine if variation in market share can be accounted for by the size of the sales force and advertising expenditures
• C)to identify the characteristics of price-sensitive consumers
• D)Both A and C are correct.

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Definitions:

Normal Good

A type of good for which demand increases as the income of the consumer increases, holding all else constant.

Wealth Effect

The change in spending and consumption patterns by individuals or households due to changes in their real or perceived wealth.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute away from more expensive goods towards cheaper ones.

Income Effect

The impact on consumer's choice arising from a change in their income, influencing their purchasing power.