Sales staff are keen to sell extended warranties because ?
Correct answer: C. they are paid commission on each extended warranty they sell.
- A. extended warranties offer value for money.
- B. the cost of repair will usually exceed the cost of the warranty
- C. they are paid commission on each extended warranty they sell.
- D. They are concerned about customer satisfaction.
Explanation
Sales employees are often paid commission on extended warranties, giving them a direct financial incentive to promote them. This incentive does not prove that the warranty offers better value or that repairs will exceed its price.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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