Question

Wholesome Pet Food has successfully specialized for 20 years in high-quality pet food made from all-natural ingredients and organically raised lamb. This brand has a strong following and is recommended by veterinarians who practice in affluent neighborhoods. If Wholesome's main supplier of lamb announces that the price for lamb will be 15 percent higher next year, which of the following is most likely? a. Companies pursuing Wholesome's business strategy are especially vulnerable to this risk. b. Wholesome will probably be able to pass the cost on to its customers because they are less sensitive to price increases than the average buyer. c. If Wholesome raises its pet food prices, customers will turn to less expensive brands such as Purina. d. Wholesome probably operates on very thin margins, and a cost increase will threaten its ability to earn average returns.

Answer 1

Answer:The answer is b wholesome will probably be able to pass the cost on to its customers because they are less sensitive to price increases than the average buyer.

Step-by-step explanation:

The price is the value attached to a product or services.when there is an increase in price goods from the producer of a product or services, such an increase in prices will be a burden to the consumers. In other words, the effect of the price increase will be feit by the consumers of such product or services. The consumers will be made to bear the burden of the price increase. For example in the case of wholesome pet food who is the main supplier of lamb who had announce a price increase of 15 percent next year. The effect of such increase in price by 15 percent will be on the customers who will be made to pay for the increase in prices of lamb. In this case, wholesome will probably be able to pass the cost on to its customers because are less sensitive to price increases than the average buyer.

Answer 2

Answer: b. Wholesome will probably be able to pass the cost on to its customers because they are less sensitive to price increases than the average buyer

Step-by-step explanation:

Wholesome sells high quality, organic natural pet food. Commodities like that are known to be quite expensive to the average buyer. We are also told that veterinarians in AFFLUENT NEIGHBORHOODS recommend Wholesome products and it has a HIGH FOLLOWING.

Logically speaking then Wholesome sells at a high price and yet their high price does not deter sales meaning that their customers are LESS price sensitive. They care more about the quality.

Should Wholesome increase the price of its foods because of the lamb increase, they can simply pass it on to their customers who are more interested in quality than price.