In Response to Duracell's Introduction of the Duracell Ultra Battery

question 238

Multiple Choice

In response to Duracell's introduction of the Duracell Ultra battery, Energizer introduced an Advanced Formula battery, but unlike Duracell, Energizer priced its batteries at a low initial price to attract the mass market.Was Energizer's pricing strategy to take market share from Duracell a success?

• A)No, because consumers equate quality of batteries with higher prices.
• B)No, because consumers are price-insensitive when it comes to batteries.
• C)Yes, because the positive association with the "Energizer Bunny" kept going, and going, and going.
• D)Yes, because consumers typically respond positively to cost-plus pricing.
• E)Yes, because the demand for batteries has unitary elasticity.

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Definitions:

Quantity Theory of Money

An economic theory that suggests the general price level of goods and services is directly proportional to the amount of money in circulation.

Velocity of Money

How quickly money moves from one exchange to another and the rate of usage of a currency unit within a designated time period.

Money Supply

The full measure of financial assets available within an economy at a specific juncture.

Dodd-Frank Act

The Dodd-Frank Act is comprehensive financial reform legislation enacted in 2010 in the United States, aimed at reducing risks in the financial system by increasing transparency and accountability.