Why Do Consumers Often Rely on Friend's Advice When Shopping

question 8

Multiple Choice

Why do consumers often rely on friend's advice when shopping for experience goods?

• A)They know their friend's tastes
• B)Friends are less likely to be biased reporters
• C)There are no search costs in seeking friend's advice
• D)Friends are always more accurate than unknown verifiers
• E)All friends share the common goal of highest quality

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Definitions:

Franchisor

A business entity that grants the rights to an individual or group to market its products or services in a specific territory under the business's brand and operating methods.

Franchisee

An individual or company that holds the rights to operate a business under the franchise's name and system.

Manager

A person responsible for controlling or administering all or part of a company or similar organization.

Venture Capitalists

Investors who provide capital to startup companies and small businesses with perceived long-term growth potential in exchange for equity, or an ownership stake.