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Contact [7]
3 years ago
10

occurs in markets with a high concentration of sellers. Any price offered by one company will be matched by its competitors in o

rder to avoid giving the low-price seller a distinct advantage. Cost-plus pricing Price signaling Value pricing Price lining Price standardization
Business
1 answer:
Vera_Pavlovna [14]3 years ago
8 0

Answer:

The answer would be PRICE SIGNALING

Explanation:

Price signaling may occur when consumers have  imperfect information about product quality. To infer quality, consumers may rely on previous experience or may use some of the product’s observable characteristics, such as  the product’s price. We examine the scenario whereby the firm can endogenously change  consumers’ beliefs about the product’s quality by altering both the price and quality of its product. Our main findings are that, in this type of setting, price signaling causes  the firm to raise its price, lower its quality, and dampen the degree to which it responds to cost shocks. If the cost of adjusting quality is sufficiently high, the dampening effect  is pronounced in the downward direction, meaning that price signaling  causes prices to  respond less to cost decreases than cost increases.

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