Answer:
Penetration Pricing Strategy
Explanation:
The reason is that the penetration strategy is used when the product that the company wants to offer to its customers has very little or no differentiation, which is the case here. It is also helpful in promoting the product as the product is sold at lower prices helps to attract potential customers to buy the product. So setting a penetration price is itself a promotion strategy as well.
The three conditions that must exist in order for a market to be perfectly competitive include: 1. a large number of vendors and customers (buyers and sellers), 2. the vendors must be selling identical products and finally, 3. new vendors must be able to freely enter the market.
False ...................
Answer: Worsen; benefits
Explanation:
Specific Automakers is signing a long term contract with the union who are the representative of workers.
Real wages should increase by = 2%
Expected inflation = 5%
Nominal wage increase = 7%
Actual inflation = 6%
Actual inflation is greater than expected inflation, so this would worsen the union and it is beneficial for the automakers because now real wage increase is only:
= Nominal wage - Actual inflation rate
= 7% - 6%
= 1%
This is an example of re-distributive cost of inflation.
