Using penetration pricing, a company initially charges a low price, both to discourage competition and to grab a sizeable share of the market.
In order to attract customers, the penetration pricing approach entails launching a new good or service at a cheap price. Gaining market share and aggressively attracting clients through low costs are the objectives. In a pricing strategy known as penetration pricing, a product's price is first set very low to quickly reach a large portion of the market and spread word of mouth. The tactic relies on the notion that consumers will transfer to the new brand as a result of the price reduction.
When companies launch a low price for a brand-new good or service, this is known as penetration pricing. Competitors are compelled to match the offer or immediately implement alternative techniques since the first price undercuts it. Customers of rivals could switch to the less expensive product.
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The question is reconstructed below:
Which of the following best describes a Nash equilibrium?
A. An outcome from which one or both competitors can improve their position by adopting an alternative strategy.
B. The unstable outcome of a repeated game.
C. An outcome that is stable only because of credible threats.
D. An outcome which both competitors see as optimal, given the strategy of their rival.
Answer:
D. An outcome which both competitors see as optimal, given the strategy of their rival.
Explanation:
Although Nash equilibrium is a game theory, it has been widely applied in economics. It states that a competitor can achieve his desired outcome by sticking to his original strategy. Both competitors' strategies are optimal when considering the decisions of each other.
Answer: 10 years to call
Explanation:
Maturity period = 25 years
Coupon rate = 7%
6.25% basis is,
- Callable in 10 years at 103
- Callable in 15 years at 102
- Callable in 20 years at par
This bond is considered as premium bond. Therefore, in case of premium bonds, Yield to call will be lower than the yield to maturity. Here, the question is which call date should be utilized. According to the rule of thumb, it states that always use the term that is nearest to the whole call date.
Hence, on the customer's confirmation, the dollar price quoted must be based on 10 years to call.
Answer:
$18,500
Explanation:
The computation of the balance of Service Revenue shown on the adjusted trial balance is shown below:
= Service revenue ending balance + accrued value
where,
Accrued value = $1,500 ÷ 3 = $500
And, the service revenue ending balance is $18,000
So, the Service revenue balance equal to
= $18,000 + $500
= $18,500
This is the answer but the same is not given in the options mentioned in the question.
