Question

This month, Joe’s Gym is opening a new location in the busy downtown area. According to ads in the local paper, the gym, unlike other gyms in town, features an Olympic size swimming pool, a full size basketball court, and state of the art equipment. The gym is also offering a free fitness evaluation by a professional trainer with every new membership.

Joe’s Gym is practicing___________________________.

a.
monopolistic competition
b.
nonprice competition
c.
collusion
d.
price-fixing

Answer 1

Joe’s Gym is practicing non-price competition

Option-b.

Step-by-step explanation:

According to the given excerpt, Joe's Gym is employing various strategies when compared to the other rivals, to attract customers. This type of market strategy is termed as non-price competition.

This strategy avoids the price wars in the market. In spite of the additional costs incurred in promotional expenditures, proves to be more profitable as compared to all the other strategies.

Here, the Joe's Gym is offering various promotional services like a full size basketball court, an Olympic size swimming pool and state of the art equipment which distinguishes it from the other competing gyms in the town. Therefore, it can be concluded that the non-price competition is followed here.

Answer 2

nonprice competition

Step-by-step explanation:

The strategy that Joe's Gym is using gives differentiated services to the users when compared to the competition, but Joe's Gym do not change prices.