Which of the Following Is a Poor Reason for a Company

question 80

Multiple Choice

Which of the following is a poor reason for a company to initiate a price cut?

• A)to boost sales
• B)to obtain prestige
• C)to dominate the market
• D)to relieve excess capacity
• E)to influence falling demand

---

Definitions:

Strictly Convex Preferences

Preferences that demonstrate a consumer's increasing marginal rate of substitution, indicating a strong preference for diversified bundles of goods over homogeneous bundles.

Indifference Curves

Graphs representing different bundles of goods between which a consumer is indifferent, showing the combinations of goods that provide the same level of utility to the consumer.

Marginal Utility

The additional satisfaction or utility a consumer gains from consuming one more unit of a good or service.

Competitive Equilibrium Price Ratio

The ratio of prices that ensures the equality of supply and demand in a competitive market, often used to observe relative price changes between commodities.