The Market for Smartwatches Has Begun to Grow, Due in Part

question 33

Multiple Choice

The market for smartwatches has begun to grow, due in part to the success of the Apple Watch.Following the successful launch of the Apple Watch in 2015, companies such as Samsung, Sony, and LG have all developed products to compete with the Apple Watch.The smartwatches introduced to compete with the Apple Watch would be considered

• A)complements to the Apple Watch.
• B)substitutes for the Apple Watch.
• C)inferior goods compared to the Apple Watch.
• D)normal goods compared to the Apple Watch.

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Definitions:

Profit-Maximizing

A strategy adopted by businesses aiming to achieve the highest possible profit given the constraints they face.

Quantities

Numerical amounts or counts of items, goods, or materials.

Third-Degree Price Discrimination

A pricing strategy where different prices are charged to different customer groups based on their elasticity of demand.

First-Degree Price Discrimination

A pricing strategy where a seller charges the maximum price that each consumer is willing to pay, capturing the entire consumer surplus.