American automobile manufacturers and dealers appear to adjust the price (sticker prices plus financing charges)by periodically changing interest rates and by using rebates and surcharges as opposed to directly changing sticker prices.Assuming that they maximize their profits,this pricing approach may reflect
A)a relatively low cost to adjust sticker prices.
B)a relatively low cost to adjust advertising.
C)a relatively high cost to adjust sticker prices.
D)a relatively high cost of advertising.

Question

Quizplus · Accepted Answer

Adjusting sticker prices frequently can be costly compared to using rebates and surcharges. Additionally, changing sticker prices frequently may cause confusion among customers and make it difficult for dealers to maintain consistent pricing. Therefore, using interest rates and rebates may be a more cost-effective approach for American automobile manufacturers and dealers to adjust their prices while maximizing their profits.

American Automobile Manufacturers and Dealers Appear to Adjust the Price