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Scenario 19.1Chantel, a resident of Denver, Colorado, decided to open up her own fine jewelry store.To do so, she used her life savings and a loan from the bank. Chantel was able to open up a store with sufficient inventory. She markets the jewelry as the “finest jewelry in the West.” The most popular item Chantel sells is a rose gold bracelet that sells for $550. During one month, Chantel’s fixed costs are $6,000. Her variable costs average about $400.Refer to Scenario 19.1. When Chantal raised the price of her rose gold bracelets by $75 to cover unexpected expenses, she was surprised to see that demand appeared to increase. She was making more sales at a higher price. This means the rose gold bracelets are ______________.a. price consciousb. elasticc. inelasticd. value consciouselastic
When marginal revenue equals marginal cost, profit is at its highest.Fred is angry. He claims his roommate, Edward, stole his idea for a new mobile app. Now Edward has successfully released the app to much fanfare. Fred is demanding that he be compensated for his idea and names what he believes to be a fair price. Edward argues that he is the one who spent the resources developing the app and marketing it. Edward claims that you cannot assess an idea using price as a factor because it is intangible and involved nothing more than having an insightful thought for a new app. Edward is correct in his assertion.Scenario 19.2.A few months before, a major B2B supplier raised prices of its products 10 percent to cover changes in market conditions. He was surprised to find how the orders from his normal customers plummeted. His normal order was $1,100. After the price increase, the average order dropped by 25 percent. He became concerned that customers mightlook elsewhere. For this reason, he decided to start offering discounts. When one of his loyal customers, David, purchases $950 worth of product for his firm, the supplier gives David the terms “4/20 net 30.” He wants to maintain his relationship with David and would ideally like to receive payment in less than a month.Refer to Scenario 19.2. How much would David have to pay if he pays in 25 days? In 19days?a. $912; $950b. $950; $760c. $950; $665d. $950; $912e. $923; $950
H&M claims to offer high fashions at attractive prices. It has often engaged in collaborations with certain fashion designers. H&M is mostlikely to appeal to the _______________ consumer.Hermes is a high-end luxury brand. Which of the following statements about Hermes ismost likely to be true?