Which of the Following Statements About Demand as a Pricing

question 316

Multiple Choice

Which of the following statements about demand as a pricing constraint is most accurate?

• A)The number of potential buyers for the product class has little effect on the price a seller can charge.
• B)The number of potential buyers for the product affects the price a seller can charge but only if the product is a luxury item.
• C)The number of potential buyers for the product affects the price a seller can charge but only if the product is a necessity item.
• D)The number of potential buyers for the brand affects the price a seller can charge in the growth stage of a product life cycle, but not in the introductory stage.
• E)Whether the item is a luxury or a necessity affects the price a seller can charge.

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Definitions:

Ameritech

A telecommunications company that was one of the Regional Bell Operating Companies following the breakup of AT&T.

Marginal Cost

The incremental cost of fabricating one more unit of a product or service.

Profit-maximizing Quantity

The point of production where a company reaches its maximum profit, occurring when marginal revenue is equal to marginal cost.

Profit-maximizing Price

The price at which a firm can achieve the highest possible profit.