In class we noted that a firm might price lower than the market demands in order to "manage for long-run profits." How would this work?
a.
Lower prices draw more consumers, who may learn to be loyal to our brand.
b.
It allows us to earn a good profit in the current quarter to satisfy market analysts.
c.
It helps us to earn a target return on our objectives.
d.
It supports that effort to manufacture off-shore.
e.
It lets us recover our costs quickly.
Answer: Lower prices draw more consumers, who may learn to be loyal to our brand.