During a prolonged period of decreased sales, the management of a chain of retail electronics stores plans to increase profits by instituting a 30 percent price increase on all of its merchandise in its stores nationwide. Even though this plan goes against the traditional relationship between price and demand, the regional managers believe that it will succeed.
The management's plan to increase profits relies on which of the following assumptions?
A A larger retail chain will continue to take a large percentage of business away from the chain's stores nationwide.
B Special promotions and financing options will attract budget-conscious consumers.
C The increase in profit made on merchandise sold will more than compensate for any drop in sales that may result from the price increase.
D A computer company is about to introduce a new computer model that is less costly for retail stores to keep in stock.
E The chain's regional branches will have to raise prices whenever new products are introduced.
The management's plan to increase profits relies on which of the following assumptions?
A A larger retail chain will continue to take a large percentage of business away from the chain's stores nationwide.
B Special promotions and financing options will attract budget-conscious consumers.
C The increase in profit made on merchandise sold will more than compensate for any drop in sales that may result from the price increase.
D A computer company is about to introduce a new computer model that is less costly for retail stores to keep in stock.
E The chain's regional branches will have to raise prices whenever new products are introduced.
A SMALL TOWN GUY
