Which of the Following Correctly Identifies the Motivation of Firms

question 136

Multiple Choice

Which of the following correctly identifies the motivation of firms using a market segmentation strategy?

• A) Firms can avoid the government's anti-trust laws by selecting a small slice of a larger market.
• B) This strategy enables a firm to identify common traits in different consumer groups.
• C) With limited resources, firms can better satisfy the wants and needs of a smaller target market.
• D) Government regulations require firms to maintain accurate records to show that the firm has not discriminated against a market segment.

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Definitions:

Profitability Measure

A financial metric used to assess a business's ability to generate earnings compared to its expenses and other relevant costs incurred during a specific period of time.

Common Stockholder's Equity

This represents the ownership interest of common shareholders in a company, calculated as total assets minus total liabilities and preferred stock equity.

Net Income

A company's remaining income after deducting all expenses and taxes from its revenue.

Accounts Receivable Turnover

Accounts receivable turnover is a financial ratio that measures how effectively a company is collecting on its credit sales by comparing net credit sales with the average accounts receivable for a period.