Use the Following Situation to Answer the Question : Situation

question 35

Multiple Choice

Use the following Situation to answer the question : situation 20-1
Assume a closed economy with no government. Suppose that autonomous consumption equals $400, planned investment equals $500, and the mpc equals 0.9.
-Using the information in Situation 20-1,the equilibrium level of aggregate output is

• A)$900.
• B)$8,000.
• C)$9,000.
• D)$10,000.

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Definitions:

Penetration Pricing

A pricing strategy where a product is introduced to the market at a low price to attract customers and gain market share quickly.

Price-sensitive

Referring to consumers whose buying behavior can be significantly influenced by price changes of products or services.

Penetration Pricing

A pricing strategy where a product is introduced to the market at a low price to attract customers away from competitors, with the aim of quickly gaining market share.

Skimming Pricing

A pricing strategy where a high price is set for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price.