In the Fall Semester,Alex Noticed That the Plastic Cola Bottles

question 42

Multiple Choice

In the fall semester,Alex noticed that the plastic cola bottles in the vending machines at his university had changed shape.Upon further investigation,he realized that each bottle contained 2 ounces less beverage than previous bottles,even though he paid the same price as last semester.The pricing objective of the beverage company is to:

• A)Increase profits by reducing the amount provided in each bottle.
• B)Build traffic at the vending machines by changing the shape of the bottle.
• C)Undercut the competition by changing the shape of the bottle.
• D)Increase market share by reducing the amount provided in each bottle.

---

Definitions:

Total Revenue

The sum of income a company receives from its business activities, usually from the sale of goods and services to customers.

Shutdown Point

The level of production and price at which a company's revenue is just enough to cover its variable costs, making it indifferent between continuing operations and shutting down.

Market Price

Refers to the current price at which a good or service can be bought or sold in a marketplace.

Variable Costs

Costs that vary directly with the level of production or output, such as raw materials and direct labor expenses.