Why Are Line Extensions More Common Than New Products

question 176

Multiple Choice

Why are line extensions more common than new products?

• A) They are higher risk and more expensive.
• B) They are guaranteed to succeed in the marketplace.
• C) They are less expensive and lower-risk.
• D) They require no market research.
• E) Modifications to existing products are very easy.

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Definitions:

Behavioral Economists

Scholars examining how psychological, cognitive, emotional, cultural, and social influences affect the financial choices of individuals and organizations.

Gains

Increases in economic benefits, such as profits, revenue, or utility.

Losses

Negative financial results from business operations, where expenses exceed revenues.

Contextual Information

Relevant background details or circumstances that help in understanding the full scope of a situation.