and retail of baked goods which includes loaves of bread, cakes, pastries, cookies and crackers. Johnson's Bakery, located in St Ann, specialises in cheesecakes. It also differentiates its products by offering low prices, discounts for children and the elderly as well as volume discounts for customers who purchase in bulk. In addition, Johnson's Bakery advertises itself as having the best quality, most convenient service and even the best package in the parish. Susan, one of Johnson's satisfied customers, purchases a slice of cheesecake for $500 and a soda for $100 every day. Johnson's desire is to keep his price low, but he has no choice but to increase the price of cheesecake by $100 to help offset the rising cost of raw materials, transportation, electricity and labour. A. Identify FOUR (4) characteristics of the type of market structure that is associated with the bakery industry. B. What are the TWO (2) types of price discrimination practised by Johnson's Bakery? C. Outline TWO (2) advantages and TWO (2) disadvantages of Johnsons Bakery's use of product differentiation and advertising as strategies. D. Use the price elasticity of demand theory to evaluate THREE (3) possible outcomes Johnson's Bakery might face if it increases the prices of its products.
and retail of baked goods which includes loaves of bread, cakes, pastries, cookies and crackers. Johnson's Bakery, located in St Ann, specialises in cheesecakes. It also differentiates its products by offering low prices, discounts for children and the elderly as well as volume discounts for customers who purchase in bulk. In addition, Johnson's Bakery advertises itself as having the best quality, most convenient service and even the best package in the parish. Susan, one of Johnson's satisfied customers, purchases a slice of cheesecake for $500 and a soda for $100 every day. Johnson's desire is to keep his price low, but he has no choice but to increase the price of cheesecake by $100 to help offset the rising cost of raw materials, transportation, electricity and labour. A. Identify FOUR (4) characteristics of the type of market structure that is associated with the bakery industry. B. What are the TWO (2) types of price discrimination practised by Johnson's Bakery? C. Outline TWO (2) advantages and TWO (2) disadvantages of Johnsons Bakery's use of product differentiation and advertising as strategies. D. Use the price elasticity of demand theory to evaluate THREE (3) possible outcomes Johnson's Bakery might face if it increases the prices of its products.
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Transcribed Image Text:The baking industry in Jamaica is very large. Several firms are involved in production, importation
and retail of baked goods which includes loaves of bread, cakes, pastries, cookies and crackers.
Johnson's Bakery, located in St Ann, specialises in cheesecakes. It also differentiates its products
by offering low prices, discounts for children and the elderly as well as volume discounts for
customers who purchase in bulk. In addition, Johnson's Bakery advertises itself as having the best
quality, most convenient service and even the best package in the parish.
Susan, one of Johnson's satisfied customers, purchases a slice of cheesecake for $500 and a soda
for $100 every day. Johnson's desire is to keep his price low, but he has no choice but to increase
the price of cheesecake by $100 to help offset the rising cost of raw materials, transportation,
electricity and labour.
A.
Identify FOUR (4) characteristics of the type of market structure that is associated with
the bakery industry.
B.
What are the TWO (2) types of price discrimination practised by Johnson's Bakery?
C.
Outline TWO (2) advantages and TWO (2) disadvantages of Johnsons Bakery's use of
product differentiation and advertising as strategies.
D.
Use the price elasticity of demand theory to evaluate THREE (3) possible outcomes
Johnson's Bakery might face if it increases the prices of its products.
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