A Basic Test of the Usefulness of the Market Segmentation

question 113

Multiple Choice

A basic test of the usefulness of the market segmentation process is whether it leads to tangible marketing actions that can

• A) increase sales and profitability.
• B) stand up to legal scrutiny.
• C) be socially responsible.
• D) create sustainable demand.
• E) produce product differentiation.

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Definitions:

Average Fixed Cost

The fixed costs of production divided by the quantity of output produced, which decreases as more units are produced.

Output Level

The quantity of goods or services produced by a firm, industry, or economy in a given time period.

Profit-Maximizing Output

The level of production at which a firm achieves the highest possible profit.

Marginal Cost

The cost of producing one additional unit of a product or service.