Anon Corporation Is a Manufacturer of Widgets

question 147

Multiple Choice

Anon Corporation is a manufacturer of Widgets.Faced with increasing input material costs,the company is considering a 15-20 percent price increase.There are significant disagreements among senior personnel in the company about this move. Which of the following,if true,would strengthen the argument in favour of a price increase?

• A)Substitutes for Widgets are available in the market.
• B)The price of materials consumed along with Widgets has gone up.
• C)A change in the environment is likely to stimulate overall demand for Widgets.
• D)Competitors have announced that they intend to keep prices at current levels.
• E)Relaxation of import restrictions would lead to foreign competitors flooding the market.

Determine the conditions for profit maximization in different market structures.

Understand the role of product differentiation in monopolistically competitive markets.

Identify market structures through graphical analysis.

Assess the short and long-run equilibrium conditions in monopolistically competitive markets.

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Definitions:

Maturity

The state of being fully developed in the body or the mind, or the point at which an instrument of credit becomes due.

Mainstream Venture Capitalists

Investors that focus on providing capital to firms considered to have high growth potential in well-established markets.

Management

The process of administering and coordinating resources efficiently and effectively in achieving predetermined objectives.

Venture Capital Investors

Individuals or firms that provide funding to start-up companies or small businesses with high growth potential in exchange for equity stakes.