Answer:
D
Explanation:
Complementary goods are goods that are consumed together
If the cost of microchips fall, it becomes cheaper to produce hardware. As a result, there would be an increase in the supply of hardware. An increase in supply would lead to a rightward shift of the supply curve. As a result equilibrium price decreases and equilibrium quantity increases.
As a a result of the decrease in price of hardware, it would become cheaper to purchase hardware. Thus, the demand for hardware increase. Since hardware and software are complements, there would also be an increase in the demand for software. This would lead to rightward shift of the demand curve for software. . An increase in demand leads to a rightward shift of the demand curve. As a result, equilibrium price and quantity increases
The pricing strategy that companies mostly use for luxury products is "Premium pricing".
Explanation:
- Premium pricing is a type of pricing strategy by which a high rate is fixed for a high quality product produced by that company.
- Premium pricing is also known as Prestige pricing.
- Rate and cost of most of the luxury and high quality product produced by a company will always tend to be higher in order to make sure that the company doesn't face any loss, On the other hand premium pricing is the key strategy for producing higher profit for a company.
- On the other it increases the brand value of that company and make them look significant based on their quality of product produced.
Answer:
The answer is B.
Explanation:
As WLM has 15% of their revenue coming from selling other relevant products leaving the other 85% coming from selling luxury sport cars, this level of revenue diversification catagorizes WLM into a dominant-business firm which is defined as firm having 70%-95% of their income from a single business.
WLM is diversified well as enough not to be considered as single-business firm which has more than 95% of their revenue from a single type product. However, to be defined as a related-linked diversified firm, WLM's revenue sources should be more diversified in which less than 70% of their income coming from a single business.
WLM is far from being the Conglomerate as Conglomerate is defined as a Corporation operating in multi-industry.
When using horizontal differentiation, a firm divides itself into sub units based on function, type of business, or Geographic area
Horizontal Differentiation :
Horizontal differentiation refers to distinctions in products that cannot be easily evaluated in terms of quality. This stands in contrast to vertical differentiation, where the distinctions between products are objectively measurable and are based in the products' respective level of quality. Horizontally differentiated products vary only marginally, as it's more efficient for producers to try to capture as many new consumers as possible with minimal additional costs. While horizontally differentiated products tend to command similar prices at equilibrium, the lack of relationship to quality does not necessarily imply that they cost the same -- two products may be virtually identical in all considerations except for color or flavor and still be offered at totally different prices.
What is meant by geographical area?
Geographical Area means an area covering all or part of the territory of a Member State or extending to all or part of the territory of other Member States.
An area of land that can be considered as a unit for the purposes of some geographical classification.
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Answer: Oligopoly
Explanation: In simple words, oligopoly refers to a market structure in which the market is dominated by small number of large buyers. The activities of one firm in such a market affects the other participants as well. Automobile industry is one of the many examples of oligopoly.
In the given case, the two producers are willing to share the market individually so that they can enjoy better amount of profits. Also they are arranging to set prices as per each others opinions so that no one looses.
Hence from the above we can conclude that the given case illustrates oligopoly.