The Strategy of Trading Down Involves

question 115

Multiple Choice

The strategy of trading down involves

• A)adding product features but using lower quality product materials.
• B)reducing product features but using higher quality product materials or ingredients.
• C)reducing the number of features, quality, or price of a product.
• D)seeking a less price-sensitive target market.
• E)changing to a mass merchandiser retailer such as Walmart or Target.

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Definitions:

Annual Lease

A contract or agreement that outlines the terms under which one party agrees to rent property from another party for a period of one year.

Payments to Workers

Financial remuneration provided to employees for their labor, often in the form of wages or salaries.

Entrepreneur's Forgone Interest

The potential revenue lost by investing in one's own business instead of utilizing those funds in an alternative investment.

Normal Profit

The level of profit necessary for a company to remain competitive in the market, covering opportunity costs, but not creating economic profit.