Consumers Look Closely at Service Quality When Comparing Competing Services

question 21

Multiple Choice

Consumers look closely at service quality when comparing competing services because

• A) they perceive all services to be essentially the same.
• B) they typically have very few services from which to select.
• C) all services are priced about the same.
• D) quality is the only relevant service characteristic.
• E) services are very difficult to evaluate.

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Definitions:

Unit Variable Costs

The costs associated with producing one unit of a product or service, which vary directly with the volume of production.

Fixed Costs

Fixed charges that are unaffected by the volume of output or the quantity sold, including rental fees and payrolls.

Production Data

Information related to the amount, type, and quality of goods or services produced.

Contribution Margin

A financial metric that represents the difference between the sales revenue of a product and the variable costs associated with producing that product.