Asked by drishika gulati on Apr 28, 2024
Verified
Sonja's Sub Shop is located in a business district that has few customers on the weekend. To attract customers on Saturday and Sundays, it reduces its prices on these two days. This is an example of
A) dynamic pricing.
B) the substitution effect.
C) the income effect.
D) the target return effect.
E) cross-price elasticity.
Dynamic Pricing
A pricing strategy that allows businesses to adjust prices in real-time based on market demand, competition, and other factors.
Business District
A section of a city where the majority of office buildings, businesses, and commercial activities are concentrated.
Weekend
The part of the week typically dedicated to rest or leisure activities, often Saturday and Sunday for many societies.
- Understand the principles of break-even analysis and its application in business decision-making.
Verified Answer
JP
Jinal PatelMay 03, 2024
Final Answer :
A
Explanation :
This is an example of dynamic pricing, which is the practice of adjusting prices based on factors such as demand, competition, and time. In this case, Sonja's Sub Shop is adjusting its prices on the weekends to attract more customers during a time when there is typically less demand.
Learning Objectives
- Understand the principles of break-even analysis and its application in business decision-making.