Organizations Use Brand Extension When Similar Products Are Added to an Existing

question 198

True/False

Organizations use brand extension when similar products are added to an existing product line under the same brand name. Offering additional features to a cell phone package is an example of brand extension.

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Definitions:

Economic Costs

The total value of all resources used to produce a good or service, including both explicit and implicit costs.

Accounting Profit

The difference between total revenue and explicit costs; it does not account for implicit costs, unlike economic profit.

Total Revenue

The entire amount of income generated by the sale of goods or services before any costs are subtracted.

Economic Costs

The total cost of choosing one action over another, consisting of both explicit costs (direct monetary outlays) and implicit costs (the value of opportunities foregone).