Managerial Accounting (15th Edition)

Published by McGraw-Hill Education
ISBN 10: 007802563X
ISBN 13: 978-0-07802-563-1

Chapter 1 - Managerial Accounting: An Overview - Exercises - Page 21: Exercise 1-7

Answer

See explanation

Work Step by Step

1. The customers would lose faith in the brands that force them to buy unneeded products. Besides, the customers would view proposals to buy a particular product as an attempt at exploitation. Consequently, it would be hard for customers to tell whether those recommended parts are genuinely needed. Customers would lose trust in all businesses that deal in automotive repairs. Accordingly, if a customer resolves not to buy a product that is necessary for their car, their safety may be endangered. Customers would safeguard themselves by boycotting the brands and calling them out on social media. 2. Once the customers discover that the repair business has a tendency to mislead them, they will resist. Customers will reduce the purchase of vehicle parts. They will leverage social media to enlighten each other about unnecessary parts that are likely to be recommended by repair businesses. Customers will strive to avoid spending money on such products. Consequently, the profits and revenues of the automotive service industry will dwindle, and so will the employment opportunities.
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