Shrinkflation and Skimpflation in Business
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Questions and Answers

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?

  • They remain stable
  • They are not affected
  • They increase significantly
  • They are negatively impacted (correct)

    • 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?

    <p>Reduce the weight, volume, or quantity of products (D)</p> Signup and view all the answers

    In a competitive industry, why might companies avoid raising prices?

    <p>To prevent customers from switching to other brands (A)</p> Signup and view all the answers

    What does market share represent for a company in relation to its competitors?

    <p>Percentage of industry sales earned by the company over a period (B)</p> Signup and view all the answers

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