The Diffusion of Innovation Theory Is Useful to Marketers in Helping

question 132

Multiple Choice

The diffusion of innovation theory is useful to marketers in helping them

• A) adjust to the performance life cycle.
• B) avoid the cost of concept testing.
• C) predict which types of customers will buy their product immediately and later.
• D) predict how long it will take for a new product to gain market acceptance.
• E) forecast sales for a new product.

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Definitions:

Demand

The desire and willingness of consumers to purchase a particular good or service at various prices.

MC > MR

A condition where the marginal cost of producing an additional unit is greater than the marginal revenue earned from selling it, suggesting a decrease in production might increase profit.

Profit

The financial gain realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

MC = MR

This abbreviation stands for the equality of marginal cost (MC) and marginal revenue (MR), a condition for profit maximization in perfectly competitive markets.