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Which Is Likely to Have the Larger Effect on the CPI

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Essay

Which is likely to have the larger effect on the CPI, a 2 percent increase in the price of food or a 3 percent increase in the price of diamond rings? Explain.


Definitions:

Product Category

A broad classification that groups products based on common characteristics or needs.

Product Line Extension

The addition of new products to an existing product line within the same brand, usually to target a different customer segment or fill a gap in the product offering.

New-Product Strategies

The plans and approaches a business undertakes to bring new products to the market effectively.

Product Diversification

A strategy employed by companies to increase profitability and achieve growth by adding new products or entering into different markets that differ from the existing lineup.

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