Criteria for Forming Segments Involve Both Similarities and Differences

question 27

Multiple Choice

Criteria for forming segments involve both similarities and differences. Which of the following statements is most accurate?

• A) Within a segment, the needs of potential buyers should be different; among segments, the needs of buyers should be similar.
• B) Within a segment, the needs of potential buyers should be similar; among segments, the needs of buyers should be different.
• C) The needs of buyers should be different, both between segments and within segments.
• D) The needs of buyers should be the same, both between segments and within segments.
• E) If there are any differences at all, you should forgo any segmentation.

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Definitions:

Fixed Costs

Expenses that do not change in the short term regardless of the level of production or sales, such as rent and salaries.

Average Total Cost Curve

A graph that shows the per unit cost of production at various levels of output.

Short-Run

A time period in which at least one factor of production is fixed, limiting the ability of firms to adjust to changes in market conditions fully.

Marginal Cost Curve

A graphical representation that shows the change in total cost when an additional unit is produced; typically upward-sloping due to increasing marginal costs.