Projecting Sales Price Changes Depends on Factors Specific to the Firm

question 4

Multiple Choice

Projecting sales price changes depends on factors specific to the firm and its industry that might affect demand and price elasticity.Which of the following types of companies would most likely be able to increase prices?

• A) A firm in a capital intensive industry that is expected to operate near capacity for the near future.
• B) A firm in a capital intensive industry in which excess capacity exists.
• C) A firm operating in an industry that is expected to experience technological improvements in its production process.
• D) A firm operating in an industry that is transitioning from the high growth to the maturity phase of its life cycle.

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Definitions:

CPI

The Consumer Price Index represents a calculated average of the prices for a mix of consumer products and services, including food, transportation, and healthcare, weighted by their importance.

Geographic Extent

The area or scope over which a specific phenomenon, activity, or influence is spread.

Public Transit

Transportation services provided by public or private organizations that are available for use by the general public, typically involving buses, trains, and subways.

CPI Base Year

The reference year used in the calculation of the Consumer Price Index, serving as a comparison point for future price changes.