Companies Must Balance the Number of Items in a Product

question 5

Multiple Choice

Companies must balance the number of items in a product line.Too many items and customers find it difficult to see the differences between the products.Too few products and the company runs the risk of _______.

• A)Having inefficiencies in production
• B)Having trouble with discounters because they may have the same product as a full-price store
• C)Having a problem with communication to the market about the products
• D)Missing important market opportunities that are not being attacked by the current product offerings
• E)None of these

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Definitions:

Crowding Out

A decrease in investment that results from government borrowing.

Accelerator Effects

The phenomenon where an increase in national income leads to a proportionally larger increase in investment spending, magnifying the initial rise in income.

Automatic Stabilizer

Economic policies and programs, such as unemployment insurance and taxation, that automatically adjust to counteract economic fluctuations without the need for government intervention.

Money Market

A section of the financial market where short-term financial assets with high liquidity are traded.