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Vipin Sing

· started a discussion

· 1 Months ago

How?? (Question:358244.0)

.

Question:

A fall in the price of a commodity leads to:

Options:
A)

A shift in demand

B)

A fall in demand

C)

A rise in consumers real income

D)

A fall in the consumers real income

Solution:

Ans: (b)

Moturu Yagnanth

· commented

· 1 Months ago

b is wrong

Knowledge Expert

· commented

· 1 Months ago

Yes option (b) is correct
Suppose you are the CFO of a Sports shoes company
And recently the competitors are producing the commodities are manufacturing more seasonable and durable entities than your shoe. They'll outrun you in the shoe manufacturing arena. Now you may see that public noticed these new competitors and slowly their focus is shifting towards these other brands.
I.e means the sales of your commodity is reducing exponentially.
In that case what would you do as a CFo?
You would reduce the prices such that people will again be attracted to your product because of less prices.
Why did you too this step?
Because the demand for your product was reducing and you desperately wanted to create a sustainable market again
Regards
TR
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