With Regard to Customer Defection, Which of the Following Statements

question 64

Multiple Choice

With regard to customer defection, which of the following statements is incorrect?

• A) Defection rates are determined by customer loyalty.
• B) The longer a company holds on to a customer, the greater is the volume of customer-generated unit sales.
• C) Lowering customer defection rates creates a higher cost structure.
• D) The longer a company retains a customer the higher the average unit cost of each sale.
• E) There is a positive relationship between the length of time that a customer stays with the company and profit per customer.

---

Definitions:

Price

The sum of money needed to buy a product, service, or commodity.

Quantity

The amount or number of a material or immaterial good considered as a unit or in discrete amounts.

Producer Surplus

The difference between what producers are willing to accept for a good versus what they actually receive in the market.

Price

The monetary figure anticipated, obligated, or dispensed in transaction for a service or good.