For the Following Questions,use the Diagram Below

question 64

Multiple Choice

For the following questions,use the diagram below:
Figure 34-7.
-Refer to Figure 34-7.The aggregate-demand curve could shift from AD₁ to AD₂ as a result of

• A)an increase in government purchases.
• B)a decrease in net exports.
• C)households saving a smaller fraction of their income.
• D)a decrease in the price level.

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Definitions:

Skimming Pricing

A pricing strategy where a high price is set for a new product to maximize profits from segments willing to pay more, before prices are lowered over time.

Demand-oriented

A pricing strategy where prices are set based on the perceived value to the customer or demand for the product, rather than on the cost of the product or market competition.

Pricing Approach

Strategies and methodologies used by companies to set the selling price of their products or services, taking into account costs, market demand, competition, and profit margins.

Price-setting Process

The method by which a company determines the selling price of its products or services, considering costs, demand, competition, and profitability.