Kellogg's Different Types of Cereals, Each Targeted at a Different

question 145

Multiple Choice

Kellogg's different types of cereals, each targeted at a different type of user, are an example of multiple products aimed at multiple markets.Manufacturing these different cereals is clearly more expensive than producing one but seems worthwhile if it adds to the manufacturer's sales revenues and profits, serves customers' needs better, and

• A)conforms to all FDA guidelines.
• B)creates economy of scale.
• C)decreases the cost of the physical plant.
• D)stabilizes the sales revenues and profits.
• E)doesn't reduce quality or increase price.

---

Definitions:

Perfectly Elastic

A situation where the demand or supply for a good or service is infinitely responsive to changes in price.

Long-Run Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied after all inputs have been adjusted to their optimal levels.

Increase in Demand

A shift in the demand curve to the right, signifying that consumers are willing to purchase more of a good or service at the same prices, due to factors like increased income or changes in tastes.

Equilibrium Price

The market price at which the quantity of a good or service demanded equals the quantity supplied, leading to market equilibrium.