Question

Andy compares mattresses. A twin sized NightSoft mattress at the large chain BuyRite costs $1,500. The BuyRite salesman and then tells Andy that the companies 24 hour customer service, free mattress cleaning, and 60 day return policy's are the best in the business. A similar twin sized model, the DarkKnights mattress, at the small store Joe's bed and linens, costs $1,495. The sales man at Joe's tells Andy to get this store offers a 30 day moneyback guarantee, plus delivery free. Which of these is Andy experiencing?A. Nonprice competition in a monopolistically competitive marketB. Nonprice competition in a purely competitive marketC. Price competition in a monopolistically competitive marketD. Price competition in a purely competitive market

Answer 1

Non-price competition in a monopolistic-ally competitive market is Andy experiencing

Explanation:

The profitability of non-prices applies to the attempts of a dominant corporation to raise its sales and profits by variating goods and production rates instead of lowering the product prices.

Either by modifying the physical attributes or through changes to advertising schemes, a dominant rival may always change his goods.

Varying inventory and distribution prices reduce the company's demand curve and increase production costs.

As a consequence, there will also be a change in the amount of income the organization will gain from extracting the volume of the commodity that equates the MR to MC.