MANAGERIAL ECONOMICS
5th Edition
ISBN: 9781337106658
Author: FROEB
Publisher: CENGAGE L
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Question
Chapter 1, Problem 10MC
To determine
The reason for advertising low price for high-profile goods and selling at loss.
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Sellers are willing to sell their product at a very low price even it high priced items cost more? What is the rational behind this concept?
a. To dominate the market with low-cost items
b. Low priced items are a magnet for customers to come in and this will create opportunity to sell low priced item with high markup price.
c. To lure frequent buyers.
d. This reduces the incentives of trade.
Why does a seller with a good reputation face a different opportunity cost foroffering poor-quality goods than a seller with no reputation to lose?
What is the major challenge presented by Amazon and Uber to Grubhub's business?
Does the restaurant industry seem like a stable options for aspiring entrepreneurs to pursue? Why
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