The Most Difficult Problem with Making the Financial Approach to Choosing

question 36

Multiple Choice

The most difficult problem with making the financial approach to choosing a channel structure operational is:

• A) The reluctance on the part of firms to use it.
• B) Obtaining accurate estimates of future revenues and costs from alternative channel structures.
• C) The great expense involved in employing this method.
• D) The inadequate capacity of existing computer systems to handle the mass of data involved.
• E) Poor attitudes on the part of managers toward using it.

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Definitions:

Elasticity Measures

These are metrics used in economics to assess how the quantity demanded or supplied of a good changes in response to changes in price or other factors.

Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, with elasticity greater than one indicating a high responsiveness.

Elasticity

A measure in economics of how the quantity demanded or supplied of a good changes in response to changes in price or other factors.

Considered Elastic

A description for goods or services whose demand or supply is significantly responsive to changes in price.