In the Diffusion of Innovation Process, Innovators Enjoy Taking Risks

question 56

Multiple Choice

In the diffusion of innovation process, innovators enjoy taking risks and are regarded as highly knowledgeable. Marketers want to identify innovators because

• A)they prefer products from established market leaders.
• B)other consumers defer to their judgment, creating the opportunity for word-of-mouth referrals.
• C)they are especially price conscious.
• D)they are easily influenced by reminder advertising.
• E)they encourage competitors to enter the market.

---

Definitions:

Risk-Averse

A characteristic of individuals who prefer to avoid risk and would rather choose an option with a more certain but possibly lower return over an uncertain option with a potentially higher return.

Total Utility

The total satisfaction received from consuming a certain quantity of goods or services.

Increasing Marginal Utility

A situation in which each additional unit of a good or service consumed provides more utility or satisfaction than the previous one.

Diminishing Marginal Utility

The economic principle stating that as a person consumes more of a good, the additional satisfaction gained from each additional unit of that good decreases.