Question

Question 108

For any advertised product, it can be assumed that a point is eventually reached at which additional advertising produces little or no additional sales. This is proof that advertising is:

		subject to the law of diminishing returns.
		governed by the law of accelerating change.
		nonmeasurable in the context of sales numbers and figures.
		subject to the law of increasing returns

Question 109

Which of the following is a variation of cost-oriented pricing?

		Odd-even pricing
		Bundle pricing
		Rate-of-return pricing
		Prestige pricing

Question 111

A computer manufacturer markets its computers through a variety of methods—telemarketing, catalog selling, cable selling, and online selling—that do not involve the use of intermediaries. Which of the following channels or types of marketing is the manufacturer using?

		Horizontal channel
		Direct channel
		Intermediary marketing
		Administered marketing

Answer 1

108) subject to the law of diminishing returns

The law of diminishing marginal returns is a theory in economics that predicts that after some optimal level of capacity is reached, adding an additional factor of production will actually result in smaller increases in output.

109) Rate-of-return pricing

Rate of return pricing is a method by which a company fixes the price of the product in such a way that it ultimately helps organizations in achieving the ultimate goal or return on the capital employed. Description: The concept of rate of return pricing is similar to the return on investment.

111) Direct channel

Direct channels allow the customer to buy goods directly from the manufacturer, while an indirect channel moves the product through other distribution channels to get to the consumer. Firms that use direct distribution require their own logistics teams and transport vehicles.