Ford Motor Company announced a major rebate program for its cars and trucks. The rebate program amounts to a simple reduction in price. The company executives hope to increase revenue as a result of this rebate program. What economic explanation would
justify this decision?
Please provide the best answer for the statement.
The company executives believe that the price decrease will increase total revenue. In this case, the executives must think that demand is elastic in this price range. When demand is elastic, a cut in price will increase total revenue.
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In measuring GDP, which of the following is included?
A) the value of durable consumption goods but not the value of nondurable consumption goods. B) the value of preparing meals at home C) the value of stocks and bonds bought and sold D) the value of increases in business inventories E) the value of used goods when they are sold
When the economy is operating at a point where aggregate demand equals long-run aggregate supply, it must be true that:
A. aggregate demand also equals short-run aggregate supply. B. the economy is in long-run equilibrium. C. prices and expected prices are the same. D. All of these are true.
Trade allows each country to take advantage of lower ___________ costs in the other country.
a. replacement b. opportunity c. marginal d. retail
In the long run, which of the following is likely to be a variable cost?
A. Wage costs but not costs for equipment. B. Rent, wages, and all other costs are variable in the long run. C. Factory rental but not wage costs. D. Interest payments on borrowed funds but not utilities.