What Is the Primary Disadvantage of Using a Market Test

question 101

Multiple Choice

What is the primary disadvantage of using a market test as a forecasting tool?

• A) It is difficult to interpret.
• B) It is expensive.
• C) It is inaccurate.
• D) It is unacceptable to consumers.
• E) It is overused.

---

Definitions:

Break Even

The point at which total costs and total revenues are equal, resulting in no profit or loss for a business.

Fixed Costs

Expenses that remain constant regardless of the amount of goods produced or sold, including items like lease payments, wages, and insurance costs.

Marginal Cost

The increase in cost resulting from the production of one additional unit of a product or service.

Fixed Costs

Costs that do not change with the level of output or production, such as rent, salaries, and insurance premiums.