Which of the Following Statements About Promotional Expenses Is True

question 103

Multiple Choice

Which of the following statements about promotional expenses is true?

• A) People correctly think that promotion money is spent primarily on advertising.
• B) The many ads that people see on the Web, in magazines and newspapers, and on TV are impressive and inexpensive.
• C) All the special sales promotions add up to less money than advertisements.
• D) Firms spend more money on advertising than on sales promotion.
• E) Firms spend less money on advertising than on personal selling.

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Definitions:

Sunk Cost

Expenses that are already spent and cannot be retrieved or changed by any future activities.

Opportunity Cost

The foregone benefit that would have been derived by choosing an alternative option.

Differential Cost

A future cost that differs between any two alternatives.

Variable Cost Per Unit

The cost that varies with each unit produced, not including fixed costs.