Question

Question 7

A firm can price its items at the same price as competitors, or try to sell its products at a price higher than its competitors. To sell at
a price higher than the competition, a firm would need to:
A enhance features or otherwise differentiate its product and justify the higher price.
reduce the production costs so the profit margin would be higher.
make sure its price end in a ".99,"
be willing to lose money on that product line.

Answer 1

Answer: (A) enhance features or otherwise differentiate its product and justify the higher price.

Step-by-step explanation:

The questions asks you to focus on selling the product and doesn't care about profitability. Production costs and loss rates don't apply at all. While ending a price in .99 can have an impact on purchasing decisions, it's generally something to impact your general pricing strategy in the market.

This leaves enhancing features and general product differentiation. In essence, you need to give your potential customers a reason why your product is priced higher.