Gray Market Refers to

question 196

Multiple Choice

Gray market refers to

• A)the segment of products specifically designed for the need of older buyers.
• B)a once active and powerful market that is rapidly becoming the bottom of the barrel.
• C)a situation where products are sold through unauthorized channels of distribution.
• D)a pricing structure that is based upon haggling that is considered acceptable in some countries but not others.
• E)the willingness of one party to accept gifts in exchange for better prices or price allowances.

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Definitions:

Inferior Goods

Goods for which demand decreases as consumer income rises, opposite to normal goods.

Normal Goods

Goods for which demand increases as consumer income rises, and decreases as consumer income falls.

Complements

Goods or services that are often used together, where an increase in demand for one leads to an increase in demand for the other.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, with high elasticity indicating a strong response and low elasticity indicating a weak response.