Economists Defend Brand Names as Useful to Consumers Because Brand

question 523

Multiple Choice

Economists defend brand names as useful to consumers because brand names

• A)provide consumers with information about quality when quality cannot easily be judged in advance of purchase.
• B)give firms a financial incentive to maintain the high quality associated with their brand name.
• C)convince consumers to spend more for products nearly identical to generic versions.
• D)Both a and b are correct.

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Definitions:

Period Costs

Expenses that are not directly tied to production and are accounted for in the period in which they are incurred, such as selling and administrative expenses.

September

The month that appears as the ninth in the sequence of months in the Gregorian calendar.

Fixed Manufacturing Cost

A type of overhead cost that does not change with the level of production, such as rent, salaries, and insurance.

Units Produced

Units produced refers to the total number of completed units of a product that a company has manufactured within a specific period.