Assume That Bosch Is a Company That Manufactures Printers for Home

question 8

Multiple Choice

Assume that Bosch is a company that manufactures printers for home computers.The printers are designed such that they do not work as effectively after a certain number of prints have been taken.Bosch also offers a warranty on the printer equal to the average time it takes to print that many pages.This is an example of _____.

• A)iterated dominance
• B)planned obsolescence
• C)a commitment strategy
• D)a natural monopoly

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Definitions:

Economic Profit

The profit a company makes after deducting both explicit (direct payments) and implicit (opportunity) costs.

Normal Profit

Normal profit is the minimum level of profit needed for a company to remain competitive in the market, equivalent to the opportunity cost of capital.

Purely Competitive Market

A market framework where numerous buyers and sellers exist, there's unrestricted access and departure, and the product is uniform, which results in participants accepting the market price as given.