Relative Advantage Is

question 20

Multiple Choice

Relative advantage is:

• A) The degree to which potential consumers perceive a new product as superior to existing substitutes.
• B) The degree to which potential consumers perceive a new product as inferior to existing substitutes.
• C) The degree to which potential consumers feel that a new product is consistent with their present needs, values and practices.
• D) The degree to which a new product is difficult to understand or use.

---

Definitions:

Mustangs

Wild horses in the Western United States, descended from horses brought to the Americas by Spanish explorers.

Law of Demand

A fundamental economic principle stating that, all else being equal, as the price of a good increases, consumer demand for the good decreases, and vice versa.

Average Price

The mean price of a good or service, calculated by dividing the total revenue by the quantity sold.

Equilibrium Price

The cost at which the amount of a product consumers want to buy matches the amount producers are willing to sell, leading to equilibrium in the market.