When Multilevel Direct Selling Becomes a Pyramid Scheme ________

question 35

Multiple Choice

When multilevel direct selling becomes a pyramid scheme ________.

• A)annual sales of products often double
• B)the salespeople are no longer independent agents
• C)the use of the party plan becomes more commonplace
• D)the selling format is usually franchised
• E)relatively little merchandise is sold to end users

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Definitions:

Average-Fixed-Cost Curve

A graphical representation showing how the average fixed costs of production decrease as output increases, due to spreading fixed costs over a larger number of units.

Total-Cost Curve

A graph that shows the total cost of producing different quantities of a good or service.

Marginal-Cost Curve

A graphical representation that shows how the cost of producing one additional unit of a good varies as the production volume changes.

Average-Fixed-Cost Curve

A graphical representation that shows the fixed costs of production per unit of output declining as the quantity of output increases.