The 20-80 Rule Reflects the Idea That ________

question 136

Multiple Choice

The 20-80 rule reflects the idea that ________.

• A) the top 20% of customers often generate 80% of the company's profits
• B) the top 20% of customers are highly satisfied and 80% of customers will recommend the company to a friend
• C) 20% of customers are unprofitable, and 80% make up a company's profits
• D) 20% of the company's profits are generated by the top 80% of customers
• E) any new product offering will be accepted by 20% of the customers immediately, but 80% of the customers will be up for grabs throughout the product's life cycle

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Definitions:

Economic Losses

Financial deficits that occur when costs exceed revenues, or when the economic value generated is less than the resources used.

Zero Economic Profit

A situation where total revenue equals total cost, meaning the firm is covering all its opportunity costs but is not making excess profit.

Potential Competitors

Businesses not currently in the market but have the potential to enter and compete.

Market Entry

The strategy or means by which a company enters a new market to sell its products or services.