A Company Decides That It Will Only Offer Two Colours

question 36

Essay

A company decides that it will only offer two colours of its product; each with the same three features because this will reduce their costs.The company makes these decisions with no input from consumers.Discuss the orientation the company is following and when such an orientation would be most successful.

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Definitions:

Household Savings

The portion of disposable income that is not used for consumption, but is set aside for future spending, emergencies, or investments.

Economic Loss

A situation where the cost of producing a good or service exceeds the revenue generated from its sale.

Investment

Positioning resources, particularly money, with the expectation of accruing income or a profit.

Capital Gains

The profit achieved from the sale of an asset, like stocks or real estate, where the sale price exceeds the purchase price.