A restrictive short-term ﬁnancial policy, as compared to a more ﬂexible policy, tends to increase the
ability of a ﬁrm to charge premium prices.

Question

Quizplus · Accepted Answer

A restrictive short-term financial policy typically involves reducing spending and limiting investments in order to conserve cash. This can result in decreased production capacity and reduced ability to innovate or respond to market changes, which could ultimately lead to a decrease in a firm's ability to charge premium prices. Therefore, a more flexible policy that allows for strategic investment and growth opportunities would likely be more conducive to maintaining premium pricing.

A Restrictive Short-Term ﬁNancial Policy, as Compared to a More