A Study Designed to Understand the Relationship Between Price and Quality

question 5

Multiple Choice

A study designed to understand the relationship between price and quality when price information is available online found that US consumers believe that higher prices correspond to higher quality for _______________but less likely to perceive this with soft goods (e.g. foodstuffs) .

• A) non-durables
• B) consumer durables
• C) consumables.
• D) Fast-moving consumer goods

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Definitions:

EBIT

Earnings before interest and taxes, a measure of a company's profitability that excludes expense and income from interest and taxes.

DFL

Degree of Financial Leverage, a ratio that measures the sensitivity of a company's earnings per share to fluctuations in its operating income, based on its capital structure.

ROCE

Return on Capital Employed; a financial ratio that measures a company's profitability and the efficiency with which its capital is used.

Financing Charges

Interest and other costs associated with borrowing funds or purchasing goods and services on credit.