Colourful Concoctions,a Maker of Children's Crayons,decides to Price Its Boxes

question 56

Multiple Choice

Colourful Concoctions,a maker of children's crayons,decides to price its boxes of crayons below the long-term market price.The firm agrees to reduce its profit margin from 30 percent to 5 percent in the short term in order to increase market share and discourage other firms from entering the crayon market.What strategy is Colourful Concoctions implementing?

• A) variable pricing
• B) skimming price
• C) penetration pricing
• D) price-lining

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Definitions:

Efficient Production Technique

A method of production that achieves the highest output with the given set of inputs or resources, minimizing waste and costs.

Labor Resources

These are the human workforce available for physical and intellectual work towards producing goods and services.

Cost per Unit

The expense incurred to produce, acquire, or maintain one unit of a product or service, often used to analyze and manage business efficiency.

Economically Efficient

A condition in which a system optimizes the allocation of resources, producing the maximum number of goods and services with the least waste.