To Be Identified as a Market Segment, Members of the Group

question 52

Multiple Choice

To be identified as a market segment, members of the group must

• A) be similar in terms of their consumption behavior.
• B) represent a large share of the entire market and have buying power.
• C) have diverse needs and have potential for future growth.
• D) have diverse needs and be willing and able to purchase the product.
• E) have the potential for future growth and increased profit or ROI.

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Definitions:

Marginal Private Cost

Marginal private cost is the cost that a producer incurs in making an additional unit of a good or service, excluding any external costs.

Socially Optimal

A state in which resources are allocated in the most efficient and equitable manner from a societal perspective.

Network Externality

A situation where the value or utility of a product or service to one user increases with the number of other users of the same or compatible products or services.

Marginal Private Benefits

The additional benefit received by consumers or producers from consuming or producing one more unit of a good or service.