Adding Additional Products to an Existing Product Line in Order

question 52

Multiple Choice

Adding additional products to an existing product line in order to compete more broadly in the industry is referred to as:

• A) product line extension
• B) product modification
• C) planned obsolescence
• D) repositioning
• E) cannibalization

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Definitions:

Inelastic

Describes a situation where the quantity demanded or supplied of a good or service is relatively unresponsive to changes in its price.

Profit-Maximizing Quantity

The level of output at which a business achieves the highest possible profit, balancing incremental costs and revenues.

Profit-Maximizing Price

The price at which a company can sell its product to achieve the highest possible profit.

Monopolistic Producer

A market structure where a single producer has the exclusive control over the production and sale of a particular good or service.