Taken together, the iPod and iTunes are ________
A) substitute goods
B) complementary goods
C) competitive goods
D) monopolistic goods
E) intangible goods
B
Explanation: B) Products or services that go with each other and are consumed together, such as the iPod and iTunes, are considered complementary goods. The demand for iTunes is great as long as consumers are buying and using iPods and other portable media devices. These two products do not substitute for or compete with one another. Apple, their manufacturer, is successful in the market, but is not a monopoly, since there are substitute products that consumers may choose to purchase. An iPod is a physical item that can be touched, so it is not an intangible good.
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What will be an ideal response?
Clearwater Hampers is a small British company that sells luxury food and drink in various combinations in picnic hampers. Food and wine are seen as classic, fail-safe gifts in a market where present-buying is increasingly tricky. Corporate customers, both in the United Kingdom and abroad, are important to the business. Clearwater has had several orders for more than a quarter of a million dollars. According to the company's leading salesperson, Peter Austin, "We have lots of repeat corporate customers as a result of the importance we place on getting the hampers out on time and filled with the right products."The fact that Clearwater Hampers has repeat corporate customers indicates that it creates ________ with its customers.
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What will be an ideal response?
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