When the Price of a Hot Dog Rises 10 Percent

question 394

Multiple Choice

When the price of a hot dog rises 10 percent, your expenditure on hot dogs increases. Hence, it is certain that

• A) hot dogs are a normal good for you.
• B) hot dogs are an inferior good for you.
• C) your demand for hot dogs is elastic.
• D) your demand for hot dogs is inelastic.

---

Definitions:

Target-Return Pricing

A pricing strategy where the price is set to achieve a targeted return on investment or profit over costs.

Cost-Plus Pricing

A pricing strategy where the selling price is determined by adding a specific markup to a product's unit cost, ensuring a profit margin is achieved.

Penetration Pricing

A pricing strategy where a product is offered at a low price to gain market share quickly.

Psychological Pricing

A marketing strategy that utilizes price points believed to have a psychological impact, encouraging purchases.