Scenario 4.4: the Demand Curve for the New Computer Game, Rock and Rock

question 27

Multiple Choice

Scenario 4.4:
The demand curve for the new computer game, Rock and Roll Trivia, is given as follows:
Q = 200 - 5P - .1Pc - .5Pd + .2A - I
where P is the price of the game
Pc is the price of a computer
Pd is the price of a diskette
A is the level of advertising
Q is the level of income
-See the information in Scenario 4.4. Suppose that the price should increase slightly from $10, how will this affect the total expenditure of consumers on the game?

• A) Total expenditures will increase.
• B) Total expenditures will not change.
• C) Total expenditures will decrease by a larger percentage than the price increase.
• D) Total expenditures will decrease by a smaller percentage than the price increase.
• E) either C or D could be true.

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Definitions:

Positioning Strategies

Marketing techniques that businesses use to establish the identity of their products in the eyes of the customer relative to competitors.

Multidomestic Approach

A strategy by which a company tailors its products or services to each local market in which it operates, treating them as separate entities.

Local Subsidiaries

Companies that operate within a specific country or region under the ownership or control of a larger parent company, often tailoring operations to local market conditions.

Globally Standardized Products

Products that are manufactured in a uniform manner and are the same in all markets around the world to achieve economies of scale and branding consistency.