Which Pricing Policy Is Probably Best for a Profit-Oriented,low-Cost Producer

question 314

Multiple Choice

Which pricing policy is probably best for a profit-oriented,low-cost producer who is introducing a new product into a market with elastic demand and is expecting strong competition very soon after product introduction?

• A)skimming price
• B)introductory price dealing
• C)meeting competition pricing
• D)penetration pricing
• E)status quo pricing

Grasp the importance and process of testing and revising economic theories to describe economic behavior.

Recognize the trade-offs faced by firms in production decisions.

Distinguish between normative and positive economic analysis.

Comprehend the development and purpose of economic theories.

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Definitions:

Discount Rate

The discount rate applied to the future cash flows of a financial instrument to determine its current value.

Present Value

The current value of a future sum of money or stream of cash flows, given a specified rate of return.

Mutual Fund

An investment vehicle comprised of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments, and other assets.

IRA Funds

Investment vehicles that provide individuals with a means to save for retirement with tax advantages.