For brands of cereal sold in the United Kingdom, the mean line length—the number of products sharing a brand name—is 9.7, while for brands of soft drinks, the mean line length is 13.3. Koushyar Rajavi and colleagues examined 203 months of economic data to investigate whether line length mediates the effects of economic expansions and contractions on brand equity (the value, manifesting as a price premium, that a brand has in consumers’ minds due to its perceived quality and other associations). They noted that it becomes more difficult for consumers to evaluate brand quality as line length increases and that consumers show high risk aversion during economic downturns. Rajavi and colleagues would thus expect that
Desmos Graphing Calculator
Verbal·Information and Ideas·Inferences
hardWhich choice most logically completes the text?
A
brand-related price premiums for cereal bars will likely show less variation across economic contractions and expansions than such premiums for soft drinks will.
B
brand-related price premiums for cereal bars are more likely to be maintained during economic contractions than those for brands of soft drinks are.
C
brands of cereal bars are more likely to increase their line lengths during economic contractions than brands of soft drinks are.
D
brands of cereal bars will likely have higher brand equity than brands of soft drinks during economic contractions but not during economic expansions.