Anon Corporation is a manufacturer of Widgets. Faced with increasing input material costs, the company is contemplating a price increase in the range of 15-20 percent. There are significant disagreements among senior personnel in the company about this move. Which of the following, if true, would weaken the argument for a price increase?
A) The input costs of raw materials are expected to increase further in the coming months.
B) Customers are loyal to the brand mainly because they believe in the quality of ingredients used.
C) Anon's competitors have announced an increase in prices.
D) One of Anon's major competitors has just declared bankruptcy.
E) Market research done by the company reveals that demand for Widgets is readily affected by the price.

Question

Quizplus · Accepted Answer

Market research indicating that demand for Widgets is highly sensitive to price changes suggests that increasing prices could lead to a significant drop in sales, weakening the argument for a price increase.

Anon Corporation Is a Manufacturer of Widgets