Which Statement About Product Lines Is Most Accurate

question 47

Multiple Choice

Which statement about product lines is most accurate?

• A) An advantage of a narrow product line is the ability to have a greater gap between price points.
• B) Product lines refer to consumer products; product mixes refer to industrial products.
• C) An advantage of broad product lines is increased likelihood of access to large retail chain distribution.
• D) A benefit of having a narrow product line is that it enables both consumers and retailers to simplify their buying decisions.
• E) A broad product line reduces R&D costs.

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Definitions:

Moral Hazard

Moral hazard occurs when a party is more likely to take risks because the negative consequences of the risk will be borne by another party.

Present Value

The present-day worth of a forthcoming sum of money or cash inflows, assessed at an agreed-upon return rate.

Interest Rate

The percentage charged on a loan or paid on savings, indicating the cost of borrowing or the reward for saving.

Price To Earnings Ratios

A financial metric that measures a company's current share price relative to its per-share earnings, used to evaluate its relative value.