The Frequent Changes to the Price of Petrol Contradicts the Concept

question 16

True/False

The frequent changes to the price of petrol contradicts the concept of menu costs.

---

Definitions:

Penetration Pricing

A pricing strategy where a new product is introduced to the market at a significantly lower price than the competition to gain market share quickly.

Price Skimming

A pricing strategy where a firm charges the highest initial price that customers are willing to pay and then lowers it over time.

Fixed Costs

Expenses that do not change in the short term, regardless of the level of production or sales activity, such as rent or salaries.

Variable Costs

Costs that vary directly with the level of production or sales, such as materials and labor.