Which of the following is considered an advantage of decreasing a product's quality?
a. It gives manufacturers greater ability to raise prices for the product.
b. It allows manufacturers to appeal to target markets unable to afford the original product.
c. It motivates customers to replace worn out products.
d. It enhances the ease of coordinating promotion from market to market.
ANSWER: b
Reducing a product's quality may let the manufacturer lower the price and appeal to target markets unable to afford the original product. Conversely, increasing quality can help the firm compete with rival firms.
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Usefulness of the cost approach would be limited when:
A: An appraiser is appraising a new structure appropriate to its site and use; B: There exists an unusually inactive real estate market; C: Appraising for proposed construction; D: Appraising an old structure with many functional deficiencies.
Andrew's restaurant was experiencing financial problems. His sales were down and he needed help. Andrew requires $20,000 to cover outstanding accounts within three days or face closing the restaurant
His bank refused to increase his line of credit so Andrew went to his accountant for suggestions. The accountant told him he could lend Andrew $20,000 but only if Andrew signed over a 50% interest in the business. In desperation, Andrew agreed. If Andrew wants to have the agreement set aside, which of the following would he rely on? A) Duress. B) Mistake C) Misrepresentation D) Non est factum E) Restitution