Chris Smith Owns a Store That Sells All-Terrain Vehicles (ATVs)

question 15

Multiple Choice

Chris Smith owns a store that sells all-terrain vehicles (ATVs) . In the past, Chris just sold one version of each of the ATVs he sold in his showroom, but to increase sales, Chris now sells a low-end, a medium-priced, and a high-end version of each of the ATVs he sells. Chris's new strategy is called a(n) ________ strategy.

• A) improving an existing product or service
• B) market penetration
• C) product line extension
• D) geographic expansion
• E) joint venture

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Definitions:

Budget

An estimate of income and expenditure for a set period of time, often used by governments, businesses, and individuals to allocate resources.

Utility-maximizing Combination

The selection of goods and/or services that provides the highest utility (satisfaction) for a consumer subject to their income and the prices of the goods/services.

Total Utility

The total satisfaction received from consuming a specific quantity of a good or service.

Marginal Utility

The extra benefit or satisfaction gained by the consumption of one more unit of a product or service.