Suppose That Last Year,the Price of Strawberries Was $2 and the Price

question 155

Multiple Choice

Suppose that last year,the price of strawberries was $2 and the price of milk was $1.This year,the price of milk is $2 and the price of strawberries is $1.Which of the following statements is true?

• A)The CPI does not change because the change in the two prices is the same.
• B)The CPI increases because milk is more expensive.
• C)The CPI decreases because strawberries are cheaper.
• D)The CPI might increase or decrease depending on the quantities in the CPI market basket.
• E)The change in the CPI depends how the market basket changed between the two years.

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Definitions:

Diversification Strategy

A growth strategy whereby a firm introduces a new product or service to a market segment that it does not currently serve.

Market Penetration

The extent to which a product or service is recognized and purchased by customers in a particular market.

Marketing Mix

The strategic set of actions that a company uses to promote its brand or product in the market, involving variations of product, price, promotion, and place strategies.

Marketplace

Any venue, physical or digital, where goods, services, or information are exchanged between buyers and sellers.