The Local Bakery Makes Such Great Cinnamon Rolls That Consumers

question 162

Multiple Choice

The local bakery makes such great cinnamon rolls that consumers do not respond much at all to a change in the price.If the owner is only interested in increasing revenue,she should

• A)lower the price of the cinnamon rolls.
• B)leave the price of the cinnamon rolls unchanged.
• C)raise the price of the cinnamon rolls.
• D)reduce costs.

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Definitions:

Explicitly Accounts

Refers to the method of recording or acknowledging financial transactions, assets, liabilities, or other elements in financial statements in a clear and detailed manner.

SML Approach

Stands for the Security Market Line approach, which illustrates the expected return of investments as a function of their risk, according to the Capital Asset Pricing Model (CAPM).

Subjective Approach

A perspective or method based on personal opinions, interpretations, points of view, emotions, and judgment.

Weighted Average Cost

A method to calculate the average cost of goods produced or acquired, weighted by the quantities.