The Tobacco Industry Has a Lerner Index of 0

question 2

Multiple Choice

The tobacco industry has a Lerner index of 0.76.Based on this information, compute the optimal markup factor.

• A)4.17 times price.
• B)4.17 times marginal cost.
• C)0.24 times price.
• D)there is not sufficient information to determine the optimal markup factor.

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Definitions:

Internal Marketing

The promotion of a company’s objectives, products, and services to its employees with the goal of aligning external marketing strategies.

Environmental Appearance

Environmental appearance relates to the visual aspect of an environment, including how clean, attractive, and ecologically responsible it is.

Perception

The process by which individuals interpret and make sense of sensory information.

Service-Profit Chain

A business concept that suggests a direct link between employee satisfaction, service quality, customer loyalty, and profitability.