Naomi Is Planning to Invest in a New Online Franchise

question 292

Multiple Choice

Naomi is planning to invest in a new online franchise - the Novel Artist,Inc.The franchisor provides proprietary software and training for designing invitations and cards for special occasions such as weddings,graduations,and birth announcements.The franchisee is obligated to pay a monthly fee to the franchisor.Naomi will use the software to create her own special designs that she will ultimately feature on her website.She also has chat availability so she can accommodate customers with special requests.Order turn-around time must be fast.She can only take on as many clients as she can make good on delivery.An advantage of Naomi's online franchise is:

• A)She has a limited territory.
• B)She has a narrow product offering.
• C)She does not need name recognition or marketing assistance.
• D)She has an unlimited territory.

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Definitions:

Constant Elasticity

refers to a condition in economics where the elasticity of a function, such as demand or supply, remains constant along the curve, indicating a proportional and consistent reaction to changes in other variables.

Relatively Elastic

Describes a situation where a product or service's demand or supply is significantly responsive to changes in price, indicating a greater percentage change in quantity demanded or supplied than the percentage change in price.

Total Revenue

The income generated from the sale of goods or services before any costs are subtracted.

Price Changes

Variations in the cost of goods or services in the market over a period of time, influenced by factors such as supply and demand.