Which of the following is an advantage of using direct distribution channels in economics?

• A. It eliminates the need for any marketing efforts.
• B. It always guarantees lower transportation costs.
• C. Producers have greater control over pricing and customer relationships.
• D. It ensures products reach a wider market than indirect channels.

Answer: (C)

Verified step by step guidance

1. Understand what a direct distribution channel means: it is when producers sell their products directly to consumers without intermediaries like wholesalers or retailers.
2. Identify the key characteristics of direct distribution channels, such as greater control over pricing, customer relationships, and marketing strategies by the producer.
3. Analyze each option by comparing it to the typical features of direct distribution channels. For example, consider whether direct channels eliminate marketing efforts or guarantee lower transportation costs.
4. Recognize that direct channels do not necessarily eliminate marketing efforts or always reduce transportation costs, nor do they always reach a wider market compared to indirect channels.
5. Conclude that the main advantage of direct distribution channels is that producers have greater control over pricing and customer relationships, which aligns with the correct answer.