A leading game-console manufacturer slashes the price of its flagship product by ten percent. Holding other things such as income and preferences constant, which of the following is the most likely group behavior prediction?
A)Price reduction will have no impact on purchase patterns.
B)Price reduction will be associated with a reduction in quality; thereby reducing sales.
C)More game consoles will be sold at lower prices.
D)Group behavior cannot be predicted.

Question

A leading game-console manufacturer slashes the price of its flagship product by ten percent. Holding other things such as income and preferences constant, which of the following is the most likely group behavior prediction?
A)​Price reduction will have no impact on purchase patterns.
B)​Price reduction will be associated with a reduction in quality; thereby reducing sales.
C)​More game consoles will be sold at lower prices.
D)​Group behavior cannot be predicted.

Quizplus · Accepted Answer

A price reduction of a flagship product is likely to increase demand and sales, assuming all other factors are constant. Therefore, more game consoles are likely to be sold at a lower price. Option A is incorrect because a price reduction usually influences purchase behavior. Option B is incorrect because there is no mention of a reduction in quality. Option D is incorrect because group behavior can be predicted in certain situations.

A Leading Game-Console Manufacturer Slashes the Price of Its Flagship