Question

If a company experiences an increase in demand for its product, what would be the most appropriate response to maintain customer satisfaction?

Option 1: Decrease production to create a sense of scarcity.
Option 2: Increase prices to match the rise in demand.
Option 3: Expand production to meet the increased demand.
Option 4: Implement stricter quality controls to manage the increased workload.

Answer 1

To maintain customer satisfaction in response to increased demand for a product, the company should expand production to meet this demand, aligning with supply and demand principles.

Step-by-step explanation:

If a company experiences an increase in demand for its product, the most appropriate response to maintain customer satisfaction would be Option 3: Expand production to meet the increased demand. This strategy aligns with the principles of supply and demand: as demand shifts to the right, an increase in production would help fulfill the higher quantity demanded at the current price. It's important to maintain the balance between supply and demand to ensure customer needs are met without causing significant price increases or product shortages that could lead to customer dissatisfaction.

On the other hand, Option 1: Decrease production to create a sense of scarcity, and Option 2: Increase prices to match the rise in demand, would likely result in unhappy customers due to either unavailability of the product or higher prices. Finally, Option 4: Implement stricter quality controls is positive but does not directly address the issue of meeting increased demand.