Final answer:
Decreasing retail margins might be considered when expanding factory capacity as a business can produce goods more cheaply, allowing for strategic pricing. In financial markets, an increase in the supply of money leads to a decrease in interest rates.
Step-by-step explanation:
Decreasing Retail Margins might be considered in a couple of scenarios. However, based on the options provided: high product demand, low competition, the need to increase profitability, and expanding factory capacity, the scenario that could potentially justify a decrease in retail margins is an expansion of factory capacity. This could allow a business to produce goods at a lower cost per unit due to economies of scale. Lowering retail margins following an expansion of factory capacity might be a strategic choice to increase market share or to compete more aggressively on price.
In the context of a financial market, a decline in interest rates is often a result of a rise in the supply of money. This can occur when there is an increase in supply of loanable funds, which can be interpreted as a rightward shift of the supply curve in the financial market. An increase in supply means that at every given interest rate, there are more funds available for lending, which tends to push interest rates down.
Answer: d) Expanding factory capacity