Unlike Tangible Goods, Virtually All Services Are Susceptible to Inconsistency

question 5

Multiple Choice

Unlike tangible goods, virtually all services are susceptible to inconsistency and variations in quality. Why is this so?

• A) because services depend on people for their delivery
• B) because services cannot be managed due to their intangibility
• C) because services are extremely time-and-place dependent
• D) because service marketers cut corners to reduce expenses
• E) because service marketers set unrealistic customer expectations

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Definitions:

Marginal Revenue

The revenue gain from selling one more unit of a good or service.

Competitive Price-searcher

A model where firms set their own prices due to product differentiation and face a downward-sloping demand curve, unlike in perfect competition.

Horizontal Line

A straight line that moves left to right (or right to left) on a graph and has a slope of zero, indicating no change in the variable it measures.

Marginal Revenue

The increased earnings from the sale of one more unit of a product or service.