When Planning Channels of Distribution, a Marketing Manager Should Know

question 155

Multiple Choice

When planning channels of distribution, a marketing manager should know that

• A) vertically integrated systems are seldom used--because of the difficulty of maintaining control.
• B) a contractual system offers both flexibility and stability for its members.
• C) the disadvantage of a corporate channel system is reduced control over distribution activities.
• D) all of the above.
• E) none of the above.

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Definitions:

Socially Optimal

A state of resource allocation where social welfare, typically measured in terms of efficiency and equity, is maximized.

Marginal Cost

The increase in total cost that arises from producing one additional unit of output.

Efficient Level

The point at which the optimal quantity of a good or service is produced, maximizing the potential benefit and minimizing waste.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.