Refer to the Scenario Below to Answer the Following Questions

question 72

Multiple Choice

Refer to the scenario below to answer the following questions.
Quills,Inc.is a manufacturer of ballpoint pens,pencils,and stationery.The firm's primary distribution strategy is to sell in large volumes to office supply stores and large discount chains.Charles Powell,CEO of Quills,had hoped to manufacture and sell in large enough quantities that prices could be held low.However,in the first several months,the firm experimented with the price portion of its marketing mix in an effort to cater to a number of markets.
-Why might have Charles Powell have avoided using market- skimming pricing at Quills?

• A)The quality and image of the products would not have likely supported the high initial price.
• B)The costs of producing a larger volume of the firm's products were too high.
• C)It was difficult for competitors to enter the market.
• D)A high price was likely to produce more market growth.
• E)The market for the products was not highly price sensitive.

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Definitions:

Market Portfolio

A theoretical portfolio consisting of all assets available in the market, weighted by their market capitalization.

Efficient Frontier

A set of optimal portfolios offering the highest expected return for a defined level of risk or the lowest risk for a given level of expected return.

Human Capital

The economic value of an individual’s skills, knowledge, and experience, considered in the context of their ability to contribute to an economy.

Arbitrage Opportunity

The opportunity to buy an asset at a lower price in one market and sell it at a higher price in another, securing a risk-free profit.