Which of the Following Is a Drawback of Longer Distribution

question 121

Multiple Choice

Which of the following is a drawback of longer distribution channels?

• A)Higher selling costs in a fragmented retail sector
• B)The inability to enter exclusive distribution channels
• C)Lower selling costs in a concentrated retail sector
• D)Higher prices charged to consumers
• E)Greater aggregate markups due to a lack of intermediaries

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Definitions:

Economic Profits

Profits calculated by subtracting both explicit and implicit costs from revenue; also known as supernormal profits.

Industry Growth

The increase in the production or sales in a particular industry over a specific period, often driven by factors such as technological advances and increases in demand.

Normal Profits

The required minimum level of profit needed for a company to remain competitive in the market; it is part of the firm's opportunity costs.

Short-run Equilibrium

A state in which market supply and demand balance each other, and as a result, prices become stable, often in a temporal context.