When Consumers Associate a Brand with a Certain Level of Quality

question 98

Multiple Choice

When consumers associate a brand with a certain level of quality and familiar attributes,allowing consumers to make quick decisions,the brand

• A) establishes novelty.
• B) is the only one the consumer will consider.
• C) reduces delivery costs.
• D) facilitates purchasing.
• E) creates brand dilution.

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Definitions:

Variable Cost

Expenses that change in proportion to the activity of a business such as raw materials and direct labor costs.

Fixed Cost

Payments that do not vary with the amount of production or sales activities, including costs like renting spaces, salary payouts, and insurance contributions.

Operating Leverage

Operating leverage describes the extent to which a company can increase its profits by increasing sales, highlighting the ratio of fixed costs to variable costs.

Net Operating Income

The amount of profit a company makes from its normal business operations, excluding any income or costs from investments and other non-core business activities.