J.T.Smith's company,Gamemaker,sells gambling equipment to gaming service companies.Since the quality of the equipment is difficult to monitor and gamblers are often the source of machine failure,Smith could cheat on the level of machine quality.However,Smith has a strong quality assurance program.A primary reason for that may be:
A)cost containment.
B)company reputation.
C)the need for reinforcement.
D)the asymmetric information Smith holds on quality.

Question

Quizplus · Accepted Answer

The primary reason for Gamemaker's strong quality assurance program is likely the company's reputation. Since Gamemaker sells gambling equipment to gaming service companies, any machine failure or decreased quality could harm the reputation of both Gamemaker and the service company using their equipment, potentially leading to lost business and revenue. Therefore, maintaining a strong reputation through high-quality equipment is likely a top priority for Gamemaker.

JTSmith's Company,Gamemaker,sells Gambling Equipment to Gaming Service Companies