Which of the following, if True, would strengthen the argument in favor of a price increase?
A) Substitutes for Widgets are available in the market.
B) The price of materials consumed along with Widgets has gone up.
C) A change in the environment is likely to stimulate overall demand for Widgets.
D) Competitors have announced that they intend to keep prices at current levels.
E) Relaxation of import restrictions would lead to foreign competitors flooding the market.

Question

Quizplus · Accepted Answer

C) If overall demand is expected to go up, Choice C, people will be more willing to pay high prices. So Choice C supports the case for a price increase. Choice A weakens the argument. If substitutes are available, people would be more likely to choose those substitutes if Anon raised its prices. Choice B is relevant to the supply curve but not the demand curve. Increased supply costs do not by themselves make customers willing to pay more. Choice D, if anything, goes against the price increase argument by suggesting that consumers will have lower-priced options. Choice E would normally result in more options (often, lower-priced options) for consumers. This would undercut the case for a price increase.

Which of the Following, If True, Would Strengthen the Argument