Question

What will most likely happen if a toy supplier sets a price too low for a product?

Answer 1

The toy supplier won't be getting as much money, and he might not be getting a profit.

Step-by-step explanation:

Answer 2

Explanation: The suppliers's sales can increase as well as decrease. As we know,

Sales Revenue = Price x quantity

Therefore, if he is able to increase his sale such that it compensates for the decrease in price, than the Sale revenue will increase and vice versa

For example, I was able to sell 10 pencils at a cost of $2 each. Therefore, my Sale revenue was $20. Now if i reduce the price to $1.5, and my sales quantity increases to 15, my sales Revenue will increase to $ 22.5, but if my sale quantity does not increase, my Sale revenue will decrease to $15.