Consumers Are Often Bewildered by the Different Array of Choices

question 18

Essay

Consumers are often bewildered by the different array of choices, plans and prices that are offered by cell phone service companies. Explain in terms of consumer surplus why this makes sense from both the company's perspective and that of the consumer.

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Definitions:

Reducing Prices

Implementing strategies to lower the selling price of goods or services to stimulate demand or remain competitive.

Supply Management

The process of identifying, acquiring, and managing the resources and suppliers needed by an organization to perform its operations effectively.

Decentralized Purchasing Structure

An organizational framework where purchasing decisions are made independently across different departments or locations, rather than being centralized.

Centralization

The organizational structure decision to concentrate decision-making authority and control at higher levels of management.