Questions: Multiple Choice Question Many firms rely on the idea that 20% of heavy users account for of total demand. 5% 10% 50% 80%

Transcript text: Multiple Cholce Question Many firms rely on the idea that 20\% of heavy users account for $\qquad$ of total demand. 5\% $10 \%$ 50\% 80\%

Solution

Solution Steps

The question is asking for the percentage of total demand accounted for by 20% of heavy users. This is a common principle in business known as the Pareto Principle or the 80/20 rule, which suggests that 80% of effects come from 20% of causes. Therefore, the answer is 80%.

Step 1: Understanding the Problem

We are given that 20% of heavy users account for a certain percentage of total demand. This scenario is often described by the Pareto Principle, which states that a small percentage of causes (in this case, heavy users) can lead to a large percentage of effects (total demand).

Step 2: Applying the Pareto Principle

According to the Pareto Principle, it is commonly observed that 20% of users account for approximately 80% of total demand. Therefore, we can express this relationship mathematically as: \[ \text{If } x = 20\% \text{ of users, then } y = 80\% \text{ of total demand.} \]

Step 3: Conclusion

Based on the analysis, we conclude that 20% of heavy users account for 80% of total demand.