Answer: e. To drive up market share
Explanation:
Differentiation strategies involve adding features to a good to make it stand out from the Competition. Since these features are usually beneficial, the value of the good goes up and the company selling them can charge more. This is the main way things are done in Monopolistic markets.
However, sometimes it is best to charge the same price the Competition is charging even though you have a better product. This way the company is able to capture Market Share because the consumers will believe they are getting a better value for their money. For instance, if a company was selling Toyotas at $2,000 and it's competitor was selling the same Toyota but with 2 extra tires for the same $2,000 who would you use? The Competitor most likely.
This is why a firm might want to keep prices in line with competitors.
Answer:
C. The speed with which general prices are rising
Explanation:
Inflation measures the rate at which the general prices of goods and services are increasing in an economy. During inflation, the purchasing power of a country's currency is eroded. Inflation means a selected basket of goods will cost more this period than it did in the previous season.
The consumer price index or CPI is the most acceptable index used in determining the rate of inflation. Inflation may result from high economic growth where firms and individuals have increased incomes resulting in too much money in circulation. A moderate level of inflation is required to promote spending and sustain favorable economic growth.
Answer: The correct answer is "d. equal to average cost, including the opportunity cost of capital.".
Explanation: In the long run the prices charged by a firm in monopolistic competition will be equal to average cost, including the opportunity cost of capital.
In long-term monopolistic competition, the demand curve will be tangent to the average long-term cost and the price set at this level. The benefits will be equal to zero and therefore there will be no entry or exit of companies.
Answer: a. The professional software package included Web 2.0 applications, but it cost more than $1,200.
Explanation:
A simple rule for writing a correct number style is that when writing numbers between 1 - 9 ( single digits numbers), you should spell them out. When writing anything larger however or if writing multiple numbers, you should write them as numerals.
This convention can be typically broken every now and then in certain cases. One of those cases is that, if you have a situation where you have 2 numbers in a sentence, you have to use one style for it and if the 2 numbers consist of 1 small number and 1 large number you would preferably have to use numerals.
For this reason Option A which has two numbers written as numerals is correct.
It is worthy of note however, that different styles exist as do Citation Styles and this answer is based on the most rudimentary of said styles.
