A small increase or decrease in consumer demand can produce a much larger change in demand for the facilities and equipment needed to make the consumer product. This is known as _____
a. the multiplier effect
b. reciprocity
c. the conversion rate
d. frequency
ANSWER: a
This phenomenon is known as the multiplier effect or the accelerator principle.The demand for business products tends to be less stable than the demand for consumer products. A small increase or decrease in consumer demand can produce a much larger change in demand for the facilities and equipment needed to make the consumer product.
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