In which of the following circumstances would you initiate a price rise?
A)Pre-emptive competitive entry
B)Rising costs
C)Excess supply
D)None of the above

Question

Quizplus · Accepted Answer

A price increase may be necessary if costs are rising in order to maintain profitability. A company cannot absorb cost increases indefinitely without impacting their bottom line.

Answer: D 
 A pre-emptive price rise in response to a potential competitor entering the market may not be necessary and could potentially harm customer loyalty. Excess supply does not warrant a price increase as it may lead to a decrease in demand.

In Which of the Following Circumstances Would You Initiate a Price