Suppose That You Are in Charge of Pricing at a Local

question 133

Multiple Choice

Suppose that you are in charge of pricing at a local surf rental shop.The business needs to increase revenue and your job is on the line.If the supply of surf boards is elastic, you:

• A)should increase the rental price of surf boards
• B)should decrease the rental price of surf boards
• C)should not change the rental price of surf boards
• D)cannot determine what to do with rental price until you determine whether demand is elastic or inelastic

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Definitions:

Generate Costs

The process of incurring expenses as a result of conducting business activities or operations.

Premium Pricing

A pricing strategy where goods or services are priced higher than the market average to emphasize their exclusivity or quality.

Everyday Items

Common products or goods used regularly for daily activities or needs.

Monopolistic Competition

A market structure where many companies sell products that are similar but not identical, allowing for competition based on quality, price, and brand.