In the Terminology of Multilevel Marketing, Which of the Following

question 389

Multiple Choice

In the terminology of multilevel marketing, which of the following statements about the relationship between upliners and downliners is most accurate? In multilevel marketing,

• A) upliners are intermediaries who deal directly with final customers, while downliners are intermediaries who coordinate the transportation and storage services the upliners need to move the goods they sell through the channel of distribution.
• B) upliners are salespeople who act as independent contractors, earning commissions on their own sales and also on the sales of downliners, who are additional salespeople that they recruit.
• C) upliners sell through electronic retailing arrangements, while downliners use more traditional methods of retail selling.
• D) upliners use intensive distribution strategies to sell a good, while downliners use either a selective or exclusive distribution strategy to sell the same type of good.

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Definitions:

Spillover Benefits

Spillover benefits occur when an economic activity positively affects unrelated third parties or the broader community, beyond the immediate buyer and seller.

Socially Optimal

A state or condition in which resources are allocated in the most efficient manner from a societal perspective, maximizing benefits and minimizing costs to the society as a whole.

External Benefits

Positive effects of a transaction that affect third parties not directly involved in the transaction.

External Costs

Costs that are not borne by the parties involved in an economic transaction but are imposed on other individuals or society at large, such as pollution or congestion.