Answered: 21. In order to enter a new market,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Please answer 21, 22, 23. Thank you!.

21. In order to enter a new market, your company decides to price its primary product relative to the price of the major competitor in the new market. To do so, which of the following should it consider?

Group of answer choices

a. The price that makes operations most efficient

b. The competitor’s cost of goods sold

c. Your company’s cost of goods sold

d. The competitor’s retail price

22. Unfortunately, Eastside Retail Store’s business has been falling off since Megastore came to the neighborhood. Chris, the sole owner, has to decide whether he will close the store or not. Two items are especially weighing in the decision. He has personally guaranteed a lease that has 2 years remaining on it (at $5,000 per month). He should keep the store open if the margin, not considering this lease, is at least

Group of answer choices

a. $1 after paying himself a market wage

b. Enough to cover the rent

c. $30,000

d. $1 with his foregoing current compensation

23. In a market this is highly competitive with little product differentiation and easy market entry, prices tend to be

Group of answer choices

a. Marginal

b. Elastic

c. Inelastic

d. Static

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Answer for Q#21

Competitive pricing strategy is where the final prices on their products or services of a firm have been analysed, modified and evaluated against the prices of their competitors.

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