You work as a forecaster for the major producer of digital cameras. You know that there is a strong positive relationship between the demand for digital cameras and the birth of a first child. A report has just been issued predicting that the birthrate is expected to increase steadily over the next 10 years. You should recommend which of the following courses of action to the firm?

Question

Quizplus · Accepted Answer

Starting to increase investment now in order to prepare for the expected increase in demand is the best course of action. By doing this, the firm will be able to meet the new demand for digital cameras once the birthrate increases. Option A is not the best course of action because raising the price of digital cameras may discourage potential customers from purchasing them, resulting in a lower demand. Option B is not the best course of action because waiting until it can be verified that the birthrate has increased may result in the firm not being prepared for the increase in demand. Option D is not the best course of action because curtailing advertising may be counterproductive and reduce demand for digital cameras.

You Work as a Forecaster for the Major Producer of Digital