Sometimes Managers Price Their Products Too Low,resulting in a Loss

question 52

Multiple Choice

Sometimes managers price their products too low,resulting in a loss of company profits.One reason this happens is that:

• A) managers attempt to buy market share through aggressive pricing,but the cuts are quickly met by competitors,which wipe out any gain in market share
• B) consumers tend to equate lower prices with low-quality goods,and they are never able to regain that lost market share
• C) price-skimming strategies only work in the short-term,and always eventually result in lower profits
• D) most managers simply lack good business sense,especially in regard to finances
• E) all of the above are reasons

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Definitions:

Critical Value

In hypothesis testing, a point on the test distribution that is compared to the test statistic to decide whether to reject the null hypothesis.

Blood Pressure Readings

Measurements of the force that blood exerts on the walls of arteries as it is pumped around the body, typically expressed in millimeters of mercury (mmHg).

Sign Test Applications

The uses of a nonparametric test that is used to evaluate the difference between the medians of two paired samples.

Normal Approximation

A method used to approximate the distribution of various sample statistics to the normal distribution under certain conditions.