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Questions and Answers
Why do companies engage in shrinkflation and skimpflation?
Why do companies engage in shrinkflation and skimpflation?
- To increase production costs
- To boost or maintain profit margins (correct)
- To reduce market share
- To draw more attention
What can happen to profit margins when production costs rise?
What can happen to profit margins when production costs rise?
- They remain stable
- They are not affected
- They increase significantly
- They are negatively impacted (correct)
How is market share calculated?
How is market share calculated?
- By lowering product quality
- By dividing a company's sales by the total sales of the industry over a period (correct)
- By increasing production costs
- By reducing the weight of products
What do companies lacking strong pricing power do when faced with rising production costs?
What do companies lacking strong pricing power do when faced with rising production costs?
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In a competitive industry, why might companies avoid raising prices?
In a competitive industry, why might companies avoid raising prices?
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What does market share represent for a company in relation to its competitors?
What does market share represent for a company in relation to its competitors?
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