Anon Corporation Is a Manufacturer of Widgets

question 35

Multiple Choice

Anon Corporation is a manufacturer of Widgets. Faced with increasing input material costs, the company is contemplating a price increase in the range of 15-20 percent. There are significant disagreements among senior personnel in the company about this move. Which of the following, if true, would weaken the argument for a price increase?

• A) The input costs of raw materials are expected to increase further in the coming months.
• B) Customers are loyal to the brand mainly because they believe in the quality of ingredients used.
• C) Anon's competitors have announced an increase in prices.
• D) One of Anon's major competitors has just declared bankruptcy.
• E) Market research done by the company reveals that demand for Widgets is readily affected by the price.

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Definitions:

Indifference Curve

A graph showing a combination of two goods that give a consumer equal satisfaction and utility, representing preferences without implying greater or lesser utility.

Convex

A shape that curves outward, or a mathematical concept that implies a set or function that holds certain properties related to this outward curvature.

Concave

A shape or curve that curves inward, resembling the inner surface of a sphere or circle, often used in mathematics and economics.

Money Income

The total amount of monetary earnings received by an individual or household, including wages, salaries, benefits, and other income sources.