One Thing That Franchise Systems, Wholesaler-Sponsored Chains, and Retail Cooperatives

question 165

Multiple Choice

One thing that franchise systems, wholesaler-sponsored chains, and retail cooperatives have in common is that they are all

• A) distribution systems in which producers also act as intermediaries in the distribution process.
• B) dependent on multilevel marketing strategies.
• C) forms of distribution systems in which a single firm owns all of the organizations involved in distributing the product.
• D) forms of contractual distribution systems.

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Definitions:

Asymmetric Information

A situation in which one party in a transaction has more or superior information compared to another.

Prevalent

Widespread in a particular area at a particular time; commonly occurring or accepted.

Moral Hazard

A situation where one party is more likely to take risks because another party bears the cost of those risks.

Agent

A person who is performing an act for another person, called the principal