Generally,as the Channel Structure Grows Longer and the Degree of Control

question 24

Multiple Choice

Generally,as the channel structure grows longer and the degree of control exercised by the manufacturer:

• A) Increases.
• B) Decreases.
• C) Remains essentially the same.
• D) Increases dramatically.
• E) Requires a shift to exclusive distribution.

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Definitions:

Diminishing Marginal Product

The decrease in the additional output produced when one more unit of input is added, keeping all other inputs constant.

Average Total Cost

The cost for each unit produced, found by taking the total cost of producing goods and dividing it by the output quantity.

Production Function

An equation that describes the maximum amount of output that can be derived from a set number of inputs.

Diminishing Marginal Product

The principle that says the marginal product of a factor of production decreases as the quantity of the factor is increased, holding all else constant.