A Good Reason for Developing or Joining a Vertical Marketing

question 117

Multiple Choice

A good reason for developing or joining a vertical marketing system

• A) is that the whole channel focuses on the same target market at the end of the channel and seems to be more effective.
• B) market competition at each level of the channel eliminates inefficient firms and serves consumers' needs better.
• C) is that no member of the channel has to bear the costs of the regrouping activities.
• D) is that no member of the channel has to plan for the whole channel since good decisions at each level run the channel.
• E) All of these are good reasons for developing or joining a vertical marketing system.

---

Definitions:

Substitution Effect

If the price of a resource, say labor, goes up, business firms tend to substitute capital or land for some of their now-expensive workers. Also, the substitution of more hours of work for leisure time as the wage rate rises.

Substitution Effect

The economic principle that as prices rise, consumers will replace costlier items with less expensive alternatives, holding the utility they receive constant.

Manufacturing Wage Rates

The amount of remuneration or earnings per unit of time by workers in the manufacturing sector.

College Graduate

An individual who has successfully completed a degree program at a college or university.