Chapter 11.1, Problem 3R

To determine

To analyze: The way in which test marketing increase the profits.

Answer to Problem 3R

Test marketing is important as to how your product is doing in the market after distribution.

Explanation of Solution

Test marketing holds a lot of importance for the company. It allows the company to test their product in a small region so as to get an idea whether the product will work in a bigger market or not. Through this, the company can measure the performance of the product and can decide whether it should be released nationwide for sale. Through this, the company can estimate the earnings that can be earned through this product beforehand.

Economics Concept Introduction

Introduction:Test marketing means offering a product for sale in a small region to see if it will sell okay if offered nationwide.