A Franchisor Discloses a Cautionary Statement That Reads, "Caution: Some

question 68

Multiple Choice

A franchisor discloses a cautionary statement that reads, "Caution: Some outlets have sold this amount. There is no assurance you'll do as well. If you rely upon our figures, you must accept the risk of not doing so well." This is an instance of ________.

• A) disclosure of earning projections based on actual data
• B) disclosure of sales projections based on hypothetical data
• C) nondisclosure of sales or earnings projections
• D) fraudulent disclosure by the franchisor

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Definitions:

Marginal Utility

The added gratification or usefulness experienced by a buyer when they consume an additional unit of a good or service.

Utility Maximization

The economic principle that individuals or firms strive to get the greatest satisfaction or benefit from their available resources.

Marginal Utility

The enhanced gratification or value a customer derives from consuming another unit of a good or service.

Utility Equilibrium

A state in consumer theory where a consumer efficiently allocates their income to maximize their total utility.