When Retailers Set Prices on New Models or Styles of Products

question 173

Multiple Choice

When retailers set prices on new models or styles of products, the price of existing models often is ________ to quickly sell them.

• A) benchmarked
• B) off-priced
• C) value-added
• D) marked down
• E) maintained

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Definitions:

Sacrifice Ratio

The sacrifice ratio is an economic concept that measures the cost of reducing inflation in terms of lost output or unemployment.

Disinflates

A process in which the rate of inflation decreases over time but does not turn negative.

Disinflation

A slowdown in the rate of inflation, indicating a reduction in the rate at which prices for goods and services rise over time.

Favorable Supply Shock

A situation in which the supply of goods increases, leading to lower prices and benefiting consumers.