What is often the largest component of logistics costs? a. ...

[@Brianna17]

What is often the largest component of logistics costs?
 a. Inventory costs
  b. Transportation costs
  c. Shipper-related costs
  d. Administrative costs

Question 2

Explain how price serves as a cue to quality.

[upturnedfurball]

Answer to Question 1

b

Answer to Question 2

Counter to the anticipated economic effect of higher prices causing a decrease in demand, for some products and services, higher prices can make a purchase seem more appealing. For some purchases, customers use price as a cue to quality, implicitly reasoning that the brand can command a high price because its quality is so good. That argument assumes a belief in the efficiency of the marketplace, yet many studies have demonstrated that there is no correlation between price and quality for most product categories. But our beliefs persist. A price's role as a cue is so strong that prices are known to contribute to the formation of expectations prior to a purchase. A price is a clear, tangible cue, and higher prices set higher expectations.

[@Brianna17]

Thank you

[upturnedfurball]

Happy to help you