Question

Though the percentages are not always the same, a general rule in business says that the large majority of a firm's revenues come from What percent of its customers?

a) 5%
b) 20%
c) 35%
d) 50%

Answer 1

The large majority of a firm's revenues come from 20% of its customers.

Step-by-step explanation:

The answer to the question is b) 20%. A general rule in business is that a large majority of a firm's revenues typically come from a relatively small percentage of its customers. This is known as the Pareto Principle or the 80/20 rule. According to this principle, around 20% of customers typically generate 80% of a firm's revenues. For example, if a firm has 100 customers, it is likely that around 20 of those customers will account for 80% of the company's revenues. This is why it is important for businesses to focus on retaining and nurturing their top customers.