Question

Services are classified as intangible because:

A) they have a physical presence.
B) their intrinsic value is embedded within their physical presence.
C) they can be processed and stored in inventories for an indefinite period.
D) they have an intrinsic value that results from a process, performance, or an occurrence.
E) they are things or objects that can be stored and possessed.

Answer 1

Services are considered intangible because their value is derived from processes or performances that cannot be physically possessed or stored. Intangible aspects like satisfaction guarantees, reputation, and added services contribute to their value. Advertising also influences intangible aspects like brand preference.

Step-by-step explanation:

Services are classified as intangible because they have an intrinsic value that results from a process, performance, or an occurrence. Unlike goods, services do not have a physical presence and cannot be stored or possessed in inventories. The value of services often lies in intangible aspects such as a guarantee of satisfaction, reputation for high quality, or the provision of additional services like free delivery or financial loans to purchase a product. Product differentiation and brand preference, often influenced by advertising, can also be seen as intangible aspects that provide value to the consumer despite not being physically tangible.