In stores, it is common to find seasonal products marked down when the season ends. What explains this behavior?
A) The store is trying to increase its customers' demand for the product.
B) The store manager must be trying to drive away customers by selling low quality products.
C) The store is trying to sell the goods and realizes that they are substitutes for other goods whose prices have risen.
D) The law of demand is being used to increase the quantity demanded.
E) The store is trying to increase its consumers' incomes by increasing their purchasing power.
D
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The major problem facing the economy is high unemployment and weak economic growth. The inflation rate is low and stable. Therefore, the Federal Reserve decides to pursue a policy to increase the rate of economic growth. Which policy changes by the Fed would tend to offset each other in trying to achieve that objective?
A. Selling government securities and raising the discount rate. B. Buying government securities and raising the discount rate. C. Buying government securities and lowering the reserve requirement. D. Selling government securities and raising the reserve requirement.
The level of long-run aggregate supply is affected by all of the following except
A) changes in the capital stock. B) changes in the number of workers. C) changes in the technology. D) changes in the price level.
As the interest rate increases, the present value of a future payment
A) increases. B) decreases. C) does not change. D) approaches infinity.
The difference between an import quota and a tariff that results in the same domestic price is
a. none; they are the same b. the quantity demanded is higher under the tariff c. the world price is higher under the quota d. the tariff revenue goes to the domestic government; quota benefits may go to foreigners e. none because both quotas and tariffs are illegal