A Small Company, Graig Inventions, Produced a Pill That Had

question 111

Multiple Choice

A small company, Graig Inventions, produced a pill that had the nutrient value of a healthy breakfast. They put it on the market as a substitute for breakfast for busy people. The product failed. Graig Inventions then marketed the pill as a diet product and it became very successful. What does the example best demonstrate?

• A) The company did not position the product well. It was difficult to convince consumers that a pill was a breakfast on the superordinate level, but it did appear to fit within the category of diet pills.
• B) The company confused a subordinate level with a basic level of categorization.
• C) The company confused a normal level with a basic level of categorization.
• D) The determinant attributes between diet pills and breakfast was not sufficiently strong.

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Definitions:

Perfectly Elastic Demand

The case in which any price increase will cause the quantity demanded to drop to zero; the demand curve is a horizontal line.

Demand Curves

Graphical representations showing the quantity of a particular good that consumers are willing to buy at different price levels, assuming other factors remain constant.

Total Revenue

The total amount of money a company receives from selling its goods or services, calculated as the quantity sold multiplied by the sale price.

Perfectly Price-inelastic

A situation where the quantity demanded or supplied of a good does not change in response to a price change.