Asked by Shalini Ballur on Jun 12, 2024
Verified
If a hot dog manufacturer acquires a bakery that primarily bakes hot dog buns,you would likely see
A) Higher prices for the hot dogs but lower prices for the buns
B) Higher prices for the buns but lower prices for the hot dogs
C) Higher prices for both the hot dogs and the buns
D) Lower prices for both the hot dogs and the buns
Hot Dog
A cooked sausage, traditionally grilled or steamed and served in a sliced bun as a sandwich.
Bakery
A place where bread, cakes, cookies, and other baked goods are made or sold.
- Acquire an understanding of how price fluctuations affect consumer interest and sales in a multi-product scenario.
- Absorb the significance of product complements and substitutes in shaping pricing and marketing strategies.
Verified Answer
DS
Davis stanleyJun 18, 2024
Final Answer :
D
Explanation :
When a hot dog manufacturer acquires a bakery that primarily bakes hot dog buns, it's an example of vertical integration. This can lead to efficiencies and cost savings in the supply chain, potentially resulting in lower prices for both the hot dogs and the buns.
Learning Objectives
- Acquire an understanding of how price fluctuations affect consumer interest and sales in a multi-product scenario.
- Absorb the significance of product complements and substitutes in shaping pricing and marketing strategies.