If 30 percent of a firm's customers account for 60 percent of annual sales, that firm is not affected by the 80-20 principle.

Question

Quizplus · Accepted Answer

The 80-20 principle, also known as the Pareto Principle, suggests that roughly 80% of effects come from 20% of causes. In this case, if 30% of customers account for 60% of sales, the firm is experiencing a similar, albeit not exact, distribution where a smaller percentage of customers contribute to a disproportionately large percentage of sales. This indicates the firm is indeed affected by a principle similar to the 80-20 rule, even if the percentages do not match exactly.

If 30 Percent of a Firm's Customers Account for 60