Companies Must Balance the Number of Items in a Product

question 85

Multiple Choice

Companies must balance the number of items in a product line.Too many items and customers find it difficult to see the differences between the products.Too few products and the company runs the risk of _______.

• A) Having inefficiencies in production
• B) Having trouble with discounters because they may have the same product as a full price store
• C) Having a problem with communication to the market about the products
• D) Missing important market opportunities that are not being met by the current product offerings
• E) Having supplier issues due to low order quantities

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Definitions:

Marginal Cost

Additional financial obligation incurred by producing another unit of a product or service.

Product-Variety Externality

Occurs when the introduction of new products benefits consumers by expanding their choices, often leading to positive market effects.

Introduction

The initial section or the beginning part of a document, presentation, or text, aiming to give an overview or background of the subject matter.

Long-Run Equilibrium

A state where supply equals demand and all markets are in balance, typically achieved over a period where all inputs can be adjusted.