Final answer:
The two levers of influence to shift customer demand when facing limited manufacturing capacity or supply shortages are price and lead time. A price ceiling does not shift the demand or supply curve; it creates excess demand at that price. Similarly, a price floor does not shift the curves but creates excess supply at the floor price.
Step-by-step explanation:
When it comes to influencing customer demand, marketing and pricing strategies are the main levers utilized by businesses. Regarding your question about shifting customer demand when unable to increase capacity or solve supply shortages, the answer is b) price, lead time. By adjusting the price, businesses can either stimulate or calm consumer demand, depending on whether they lower or increase prices. Additionally, by varying the lead time, which is the time from when an order is placed until it is fulfilled, companies can incentivize customers to wait for the product, thus smoothing out spikes in demand.
Selecting the correct answer to how a price ceiling will usually shift, we must understand that a price ceiling is a government-imposed limit on how high a price can be charged for a product or service. A price ceiling, set below the equilibrium price, makes it illegal to charge a higher price, thereby directly affecting how much of a product is supplied and leading to a supply shortage. However, it does not shift the supply or demand curve itself; it creates excess demand at that price level. Hence, the correct answer is d. neither.
In contrast, a price floor is a legally established minimum price that must be paid for a good or service. If a price floor is set above the market equilibrium, this will result in excess supply at that price level. Again, the price floor does not shift the supply or demand curves but rather creates excess supply or a surplus at the price floor level. The correct answer here is also d. neither. One way to visualize this concept is by sketching scenarios on a demand and supply diagram, illustrating how a price ceiling or floor impacts the equilibrium without shifting the supply or demand curves.