A Combination of Price and Prestige Sensitivity in China Has

question 23

Multiple Choice

A combination of price and prestige sensitivity in China has contributed to _____________________________________.

• A) a large black market for counterfeit brands
• B) an inability for U.S. firms to be successful there
• C) large and rapid profitability for foreign firms entering the Chinese market
• D) a lack of interest in prestige brands

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Definitions:

Operating Expenses

Costs related to the day-to-day operations of a business, excluding the cost of goods sold, such as rent, utilities, and payroll.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor directly used to create the good.

Transfer Price

The cost at which divisions within the same organization trade goods and services with each other.

Operating Income

Earnings from a company’s primary business activities, excluding deductions of interest and taxes.