The Increasing Importance of Nurturing Long-Term and Widespread Relationships with Customers

question 12

Multiple Choice

The increasing importance of nurturing long-term and widespread relationships with customers has led many firms to adopt a selling approach,which uses several professionals to make a sale and win a contract.This approach is called:

• A)cooperative selling.
• B)team selling.
• C)missionary selling.
• D)account management.

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Definitions:

Constant Returns to Scale

A situation in which output increases by the same proportion as inputs when the scale of production is changed.

Long-run Average Total Cost

The average total cost when all factors of production are variable and economies of scale are fully exploited, indicating the lowest possible cost per unit.

Economies of Scale

Economies of scale refer to the cost advantage that arises with an increased output of a product, as fixed costs are spread out over more units of production, leading to a decrease in the per-unit cost.

Diseconomies of Scale

The phenomenon where production costs increase as a firm's production scale becomes too large, leading to inefficiencies.