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:

Normal Markup

The standard amount or percentage added to the cost of a product to determine its selling price.

Common Stock

Equity securities that represent ownership in a company, providing voting rights and a share in the company’s profits through dividends.

Equity Method

A method of accounting for investments, where the investor recognizes its share of investee's profits and losses in its own income statement, typically used when the investor has significant influence over the investee.

Noncontrolling Interest

The portion of equity in a subsidiary held by investors other than the parent company, representing a minority stake that does not give its holders control over the company.