Many manufacturers sell products labeled as having imperfections at a discount at their factory outlets but do not ship these imperfect goods to regular retail outlets. Why?
What will be an ideal response?
There is some substitutability between the goods, but imperfects sell for a lower price. Suppose, for example, the good sells for $2, but imperfects sell for $1. Both goods cost the same to ship, say $1. As a result, the relative price of an imperfect at a factory outlet is (1/2 ) but rises to (2/3 ) at the retail outlet, where imperfects will not sell because of the higher relative price.
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a. A John Deere factory. b. A Hewlett-Packard laser printer. c. A cement mixer. d. 500 shares of General Motors stock.
Smith argues that American producers cannot compete with foreign producers because wages are lower in foreign countries than in the United States. Smith is
A) advancing the foreign export subsidies argument for protectionism. B) making the mistake of believing that high wages mean high costs. C) advancing the antidumping argument for protectionism. D) making the mistake of believing that productivity is higher in foreign countries than in the United States. E) none of the above
If the market share of the largest firm in the dental insurance field were 20%, then theoretically the highest possible Herfindahl-Hirschman Index in this field would be
A. 400. B. 1,000. C. 2,000. D. 4,000.
Securities is a term that refers to ______.
a. bonds and stocks b. land and buildings c. coins and currency d. insurance and wages