Question

A record company went out of business because too many of its customers downloaded its music illegally from the internet rather than purchasing the digital copy from the record company. This instance serves as an example of:

Answer 1

Answer:

Market Power.

Explanation:

It's an example of Market Power, because companies should be able to know where is going the market in the moment, in order to take decision in the same situation. The record company needs to apply some marketing studies to know who are really their clients, where people consume music, digital or not digitally.

Since that the record company didn't obey the market, their cost was really high for that mistake.