The Text Claims That Economies of Scope Must Be Supported

question 16

Multiple Choice

The text claims that economies of scope must be supported by potential transaction cost savings:

• A)This is true. The firm itself must be able to save on transaction costs
• B)This is true - however, the saving could be on behalf of the firms' customers. This would work too.
• C)This is not quite true. Transaction cost savings are nice to have, but not necessary
• D)This is untrue. The text is mistaken.

---

Definitions:

Technical Sophistication

The level of advanced technical knowledge and capability incorporated into products, processes, or services.

Complexity

A characteristic of systems or situations that involves multiple interrelated parts, making them difficult to understand, predict, or manage.

Product Life Cycle

A model that describes the stages a product goes through from its introduction to the marketplace until its decline and eventual withdrawal. These stages typically include introduction, growth, maturity, and decline.

Promotional Mix

The blend of different marketing strategies (advertising, sales promotion, public relations, personal selling, and direct marketing) used to achieve marketing goals.