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Questions and Answers
If income decreases, demand for cheaper products increases.
If income decreases, demand for cheaper products increases.
False
An increase in the number of suppliers leads to a decrease in supply.
An increase in the number of suppliers leads to a decrease in supply.
False
Technological changes always lead to a decrease in supply.
Technological changes always lead to a decrease in supply.
False
Changes in consumer preferences do not impact demand.
Changes in consumer preferences do not impact demand.
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If providers expect prices to rise, supply increases.
If providers expect prices to rise, supply increases.
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Competition is influenced by the availability of substitute goods.
Competition is influenced by the availability of substitute goods.
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Market research only provides information about existing customers, not prospective ones.
Market research only provides information about existing customers, not prospective ones.
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Primary sources of market research always involve conducting empirical studies.
Primary sources of market research always involve conducting empirical studies.
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Secondary sources of market research are tailored to the specific interests of a business.
Secondary sources of market research are tailored to the specific interests of a business.
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Customer analysis only focuses on who the current customers are, not potential customers.
Customer analysis only focuses on who the current customers are, not potential customers.
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Customers who buy products are always the same people who use them in both B2C and B2B markets.
Customers who buy products are always the same people who use them in both B2C and B2B markets.
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Knowing where customers buy products helps identify their preferred channels of distribution.
Knowing where customers buy products helps identify their preferred channels of distribution.
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Inelastic demand is commonly associated with products that people do not necessarily need.
Inelastic demand is commonly associated with products that people do not necessarily need.
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The elasticity of demand is solely determined by prices and price changes.
The elasticity of demand is solely determined by prices and price changes.
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The elasticity of demand remains constant whether in the short run or the long run.
The elasticity of demand remains constant whether in the short run or the long run.
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Distribution partners only handle logistics tasks and do not inform consumers about products.
Distribution partners only handle logistics tasks and do not inform consumers about products.
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Distributors do not sell directly to businesses.
Distributors do not sell directly to businesses.
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Promotion activities aim to only inform potential customers, not the general public.
Promotion activities aim to only inform potential customers, not the general public.
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Return on equity (ROE) is calculated by dividing profit before tax and interest (EBIT) by equity.
Return on equity (ROE) is calculated by dividing profit before tax and interest (EBIT) by equity.
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ROCE can be calculated using either capital employed at the end of the year or average capital employed.
ROCE can be calculated using either capital employed at the end of the year or average capital employed.
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Capital employed at the end of the year is calculated by subtracting non-current liabilities from equity.
Capital employed at the end of the year is calculated by subtracting non-current liabilities from equity.
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Average capital employed is calculated by adding capital employed at the beginning of the year to capital employed at the end of the year and dividing by 2.
Average capital employed is calculated by adding capital employed at the beginning of the year to capital employed at the end of the year and dividing by 2.
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Investors generally prefer businesses with a low ROCE for stable returns over time.
Investors generally prefer businesses with a low ROCE for stable returns over time.
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Asset turnover aims to indicate how much profit was generated by every euro invested in net assets.
Asset turnover aims to indicate how much profit was generated by every euro invested in net assets.
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The formula for total cash flow in a cash flow statement is: Money at the end of the year - Money at the beginning of the year.
The formula for total cash flow in a cash flow statement is: Money at the end of the year - Money at the beginning of the year.
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The percentage of current assets can be calculated as: Current assets divided by Total liabilities.
The percentage of current assets can be calculated as: Current assets divided by Total liabilities.
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Equity development is determined by subtracting the total equity at the beginning of the year from the total equity at the end of the year.
Equity development is determined by subtracting the total equity at the beginning of the year from the total equity at the end of the year.
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The equity ratio is calculated as: Equity divided by Total liabilities.
The equity ratio is calculated as: Equity divided by Total liabilities.
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A balance between non-current assets and long-term financial resources exists when Equity + Non-current liabilities < Non-current assets.
A balance between non-current assets and long-term financial resources exists when Equity + Non-current liabilities < Non-current assets.
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Reading a balance sheet helps in determining the percentage of current liabilities by dividing Current liabilities by Total liabilities.
Reading a balance sheet helps in determining the percentage of current liabilities by dividing Current liabilities by Total liabilities.
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