Piper & Son makes pickled peppers, sold in upscale supermarkets and specialty food stores. The company has profit-maximizing pricing objectives, so managers constantly monitor the prices of key ingredients such as peppers, vinegar, and garlic. How can setting the price for pickled peppers too high yield profits that are lower than the maximum?
A) The high price will cause the convenience goods to become shopping goods.
B) The high price will hurt the company's reputation, so the product will decline.
C) The high price will generate a large profit per jar, but too few jars will be sold.
D) Customers will insist on paying a lower price, resulting in less income.
E) The high price will cause expenses to rise, reducing profits.

Question

Quizplus · Accepted Answer

When the price for pickled peppers is too high, the company might only sell a small number of jars, even though the profit per jar is high. This could lead to lower overall profits than if the company had set a slightly lower price and sold more jars.

Piper & Son Makes Pickled Peppers, Sold in Upscale Supermarkets