You Are Working for an Athletic Shoe Company That Has

question 36

Multiple Choice

You are working for an athletic shoe company that has just developed a shoe that is 40% lighter than any shoe on the market. This shoe is ideal for distance runners, and your company is confident that runners around the world will want to buy the shoe. Based on this information, you suggest that your company charge a higher price than other shoes on the market that is based on which of the following factors?

• A) what competitors are charging
• B) your cost to produce the product
• C) the maximum price customers are willing to pay
• D) what competitors are charging.

Analyze the impact of demand, cost, and industry adjustments on the equilibrium price and quantity in the long run.

Distinguish between constant-cost, increasing-cost, and decreasing-cost industries and their effects on long-run supply.

Recognize the conditions under which long-run equilibrium is achieved in a purely competitive market.

Grasp the concept of resource allocation efficiency in the context of marginal cost and price equality.

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Definitions:

Market Penetration

A quantification of the volume of sales or adoption rate of a product or service as compared to the entire theoretical customer base for that item.

Market Penetration

A strategy aimed at increasing a company's market share for an existing product, or promoting a new product, within an existing market.

Product Development

The process of bringing a new product to market, including idea generation, design, development, and marketing.

Market Development

A growth strategy involving the promotion of existing products into new markets or to new segments, aiming to increase sales and customer base.