Which of the Following Best Explains Why Delicia Co

question 32

Multiple Choice

Which of the following best explains why Delicia Co., a manufacturer of potato chips, prices each bag of potato chips at 99 cents rather than $1.00?

• A) To encourage consumers to think these chips are less expensive
• B) To attract those consumers who are not too keen about the quality of the chips
• C) To create a signal that these chips are exceptionally fine
• D) To increase sales by offering the chips at a discounted price

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Definitions:

Market Price

The current price at which a good or service can be bought or sold in a marketplace.

Unionized Plumbers

Plumbers who are members of a labor union, which negotiates wage rates and working conditions on their behalf.

Wage Rate

The amount of compensation paid to an employee by an employer in exchange for work performed, typically expressed per hour or year.

Total Demand

The complete quantity of a good or service that consumers are willing and able to purchase at a certain price level across the market.