Which of the Following Statements Describes a Weakness Inherent in the Use

question 77

Multiple Choice

Which of the following statements describes a weakness inherent in the use of the marginal analysis model for establishing an advertising budget?

• A)It is unsuitable as a basis for budgeting in case of direct response advertising.
• B)Only environmental factors that are considered by the model will affect the effectiveness of the promotional program.
• C)Budgetary amount is often set by fiat.
• D)The budget is determined by management solely on the basis of what is felt to be necessary.
• E)It is very illogical and virtually no theoretical base is used to determine the budgets.

Understand the principle of ceteris paribus and its importance in economic analysis.

Identify the effects of changes in income and prices on consumer behavior and market demand.

Understand the concept of ceteris paribus and its application in economic analysis.

Identify and explain the fallacy of composition in economic reasoning.

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Definitions:

Manufacturer's Branch Office

A localized office or division of a manufacturing company that conducts operations closer to specific markets or suppliers.

Brokering Agent

An intermediary or facilitator between a buyer and a seller, helping to negotiate transactions or agreements.

Cash and Carry Wholesaler

A type of wholesaler that operates by selling goods for cash and where the buyer carries away the goods immediately.

Merchant Wholesaler

An intermediary entity that buys goods in bulk from manufacturers to resell them to retailers or other buyers, typically without modifying the goods.