Scenario 7.2
Use the following scenario to answer the questions.
Accura Brake Company is a supplier of brake components to the manufacturers of lawn
tractors and 4-wheel ATVs. It also sells its products to independent repair centers,
dealers, and other wholesalers in the northeast and southern states of the USA. Accura
Brake has done research on the demand for lawn tractors and found that most
manufacturers are in the states of Kentucky, Tennessee, and Alabama. Research also
shows that most of the dealers who sell directly to individual consumers are in the
Midwestern states, while dealers who sell to small business landscaping companies tend
to be located in the northeastern states. Thus, the board of directors of Accura Brake
Company is considering expansion of its distribution to markets in the Midwest. Last
year, Accura Brake’s sales to the manufacturers of lawn tractors declined partially due
to the fact that more consumers were hiring small landscaping businesses to maintain
their gardens. This decline in sales for Accura Brake is an example of:
a. product scarcity.
b. joint demand.
c. derived demand.
d. reciprocity demand.
e. inelastic demand.
Which of the following is not a requirement or characteristic of a market?
a. The ability to purchase a product
b. A large number of people or organizations
c. The authority to buy a product
d. The willingness to use buying power
e. The need for a specific product in a specific product category