Manufactures Often Offer a Temporary Price Reduction to Stimulate Sales

question 1

Multiple Choice

Manufactures often offer a temporary price reduction to stimulate sales known as a price deal.Price deals ________.

• A)may be printed on the product package itself
• B)may be a price-off flag or banner on the store shelf
• C)involves giving the customer more product instead of lowering the price
• D)A and B
• E)B and C

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Definitions:

Positive Externality

A beneficial effect experienced by a third party or the society as a whole, resulting from an economic transaction.

Market

The environment in which buyers and sellers interact to exchange goods, services, and information, setting prices through supply and demand.

Socially Optimal Quantity

Socially Optimal Quantity is the level of production or consumption of a good or service that results in the maximum possible economic efficiency and welfare, taking into account all social costs and benefits.

External Benefit

A positive effect or advantage that results from a product or service's use, extending beyond the direct buyer or consumer to others not involved in the transaction.