Sellers are willing to sell their product at a very low price even it high priced items cost more? What is the rational behind this concept? a. To dominate the market with low-cost items b. Low priced items are a magnet for customers to come in and this will create opportunity to sell low priced item with high markup price. c. To lure frequent buyers. d. This reduces the incentives of trade.
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Sellers are willing to sell their product at a very low price even it high priced items cost more? What is the rational behind this concept?
a. To dominate the market with low-cost items
b. Low priced items are a magnet for customers to come in and this will create opportunity to sell low priced item with high markup price.
c. To lure frequent buyers.
d. This reduces the incentives of trade.
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Solved in 3 steps
- If you want to increase demand for your restaurantbut are unable to lower prices or increase advertising,what steps might you take?Price elasticity of demand is more likely to be greater than one if: A. consumers have a long time to adjust to a price change. B. the product is a necessity. C. demand is inelastic. D. there are few close substitutes for the product. E. total revenue declines in response to a price reduction.A good will have a more inelastic demand Select one: a. if it is considered a necessity. b. the greater the availability of close substitutes. c. the longer the period of time. d. the narrower the definition of the market.
- If you wanted to increase demand for your restaurant butare unable to lower prices or increase advertising, whatsteps might you take?If demand is flat, then Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b C d an increase in price will reduce total revenue, indicating little pricing power. an increase in price will increase total revenue, indicating little pricing power. a decrease in price will reduce total revenue, indicating a lot of pricing power. a decrease in price will have no effect on total revenue, indicating no pricing power. Your answerSnooki, a new marketing intern, was a little scatterbrained during the first meeting with her manager, when she made four statements about pricing. Which one of her four statements about pricing was correct? a. A product with an elastic demand is likely to face little competition. b. An EDLP retailer offers many price promotions. c. A product with an elasticity of demand of -0.7 will enjoy increases in revenue when prices are cut. d. Cost-plus pricing is not the perfect pricing strategy because the pricing method ignores customers’ willingness to pay and competitors’ pricing strategy.
- Advertising could lead to lower prices a. if the advertising focusses on making demand as inelastic as possible b. if economies of scale achieved from more output exceed the advertising cost. c. if the advertising shifts the demand curve to the left. d. if the advertising intensity is low. e. under no circumstances, since the advertising costs money.A. “There is constantly a shift in supply and demand curves and markets are never at equilibrium. As a result, there is no purpose of the concept of equilibrium.” Do you agree/disagree with this statement. B. Resorts give discounts to individuals who book in advance and stay over a weekend. Individuals who book at the last minute and do not stay over a weekend usually pay full price. Explain the difference between the two groups’ demand for resorts and the resorts’ pricing decisions?You live in a town with 300 Adults and 200 children, and you arc thinking about putting on a play to entertain your neighbors and make some money. A play has a fixed cost of $2,000, but selling an extra ticket has zero marginal cost. Here are the demand schedules for your two types of customer: a. To maximize profit, what price would you charge for an adult ticket? For a child's ticket?How much profit do you make?b. The city council passes a law prohibiting you from charging different prices to different customers. What price do you set for a ticket now? How much profit do you make?c. Who is worse off because of the law prohibiting price discrimination? Who is better off? (If you can, quantify the changes in welfare.)d. If the fixed cost of the play were $2,500 rather than $2,000, how would your answers to parts (a), (b), and (c) change?
- Multiple Choice question if in the short run the demand for transit by train is inelastic and in the long run the demand is elastic, then a price: a.increase will increase total revenue in the short run but decrease total revenue in the long run. b.decrease will decrease total revenue in the short run and decrease total revenue in the long run. c. increase will decrease total revenue in the short run but increase total revenue in the long run. d.decrease will increase total revenue in the short run but decrease total revenue in the long run.Choose the letter of the correct answer. ____1. It is designed to measure the response of quantity demanded when price changes. A. Elasticity C. Elastic B. Elasticity of Demand D. Elasticity of Supply ____2. It is the ratio or percentage in quantity to a percentage change in price along the given supply curve. A. Elasticity of Demand C. Price Elasticity of Supply B. Elasticity of Supply D. Price Elasticity of Demand ____3. It focuses on the analysis of the behavior of individual economic agents. A. Economics C. Macroeconomics B. Macro aspect D. Microeconomics ____4. It refers to the number of goods and services that a consumer is willing able to purchase. A. Concept of Supply C. Elasticity of Demand B. Concept of Demand D. Elasticity of Supply ____5. It refers to the number of goods and services that a firm is willing and able to offer for sale. A.…When a walk-in clinic spent $5,000 a year on newspaper advertising, it saw 5,000 patients a year. When it increased its annual advertising expenditure to $7,500 per year, it saw 10,000 patients a yeara. What is the change in advertising expenditures?b.What is the change in patient visits?c. What is the advertising elasticity of demand?d. Do you think the increase in advertising expenditures was worthwhile and why?