If Prices of Goods and Services Quickly Adjusted to Demand

question 220

Multiple Choice

If prices of goods and services quickly adjusted to demand shocks, then

• A) firms would find it difficult to produce at their optimal output rates.
• B) output rates would quickly adjust to changes in demand.
• C) firms would find it easier to produce at their optimal output rates.
• D) the economy would experience severe short-run fluctuation.

---

Definitions:

Unique Product Attributes

Unique product attributes are distinctive features or characteristics that set a product apart from its competitors, catering to specific customer needs or preferences.

Positioning Product

The strategy of designing and representing a product or service to occupy a distinctive and appealing image in the minds of the target market.

Differentiators

Features or attributes of a product or service that set it apart from competitors in the eyes of the target audience.

Perceptual Map

A means of displaying in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how they perceive competing products or brands, as well as the firm’s own product or brand.