If Consumers Switch Away from Eating Margarine at the Same

question 210

Multiple Choice

If consumers switch away from eating margarine at the same time that the number of margarine suppliers increases, then:

• A) these two effects cancel each other out and there is no change in the margarine market equilibrium.
• B) the demand curve shifts left and the supply curve shifts right.
• C) there is a margarine price increase.
• D) there is an excess demand for margarine.
• E) the equilibrium quantity of margarine must increase.

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Definitions:

Discounts

A reduction applied to the normal selling price of goods or services, offered to stimulate sales or attract customers.

Marketing Pricing Strategy

The approach a business takes in setting the price for its products or services to achieve specific marketing objectives.

Predatory Pricing

A strategy where a company sets extremely low prices with the intent to eliminate competition or deter new entrants to the market.

Experience-Curve Pricing

A pricing strategy that assumes costs will decrease over time as experience in production increases, leading to lower prices for consumers.