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Which statement describes the long tail

A. A small amount of revenue derived from a large number of units among a small number of choices
B. A large amount of revenue derived from a small number of units among almost unlimited choices
C. A large amount of revenue derived from a large number of units among a small number of choices
D. A small amount of revenue derived from a small number of units among almost unlimited choices

1 Answer

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Final answer:

The long tail in business refers to earning a small amount of revenue from a small number of units across numerous unique products. The best description of the long tail is a small revenue derived from a small number of units among almost unlimited choices, representing the diversification and niche marketing in a long tail strategy. The correct option is D.

Step-by-step explanation:

The concept of 'long tail' refers to a business strategy that allows companies to realize significant profits by selling low volumes of hard-to-find items to many customers, instead of only selling large volumes of a reduced number of popular items. The correct statement that describes the long tail is 'D.

A small amount of revenue derived from a small number of units among almost unlimited choices'. This is because a company operating under the long tail model typically deals with a large number of niche products, each of which sells in small quantities, but the collective sales of these numerous products can result in a significant source of revenue.

Choice D is a better answer than choice B, because B implies a high revenue from few units and does not take into account the cost and sales volume necessary for a long tail business model. The long tail is characterized by almost unlimited choices leading to moderate revenues spread out across many unique items or services.

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