GENERAL KNOWLEDGE

Detailed explanation-1: -Elastic demand means the product demand depends on the segmentation process of a firm, while inelastic demand means the product demand depends on the targeting process of a firm. In the context of pricing, brand loyal customers are elastic in nature.

Detailed explanation-2: -Which of the following is true about competitive pricing? It is at a medium level, somewhere in between extremes, using competitors’ prices as a starting point, and adjusting from there.

Detailed explanation-3: -A low price is a sure sell because the demand for many goods is highly elastic. Maintaining an artificially low price for a period of time leads consumers to expect it as a customary feature of the product.

Detailed explanation-4: -Segmented pricing is used when a company sells a product at two or more prices even though the difference is not based on cost.

Detailed explanation-5: -A group of firms that have a formal agreement to collude to produce the monopoly output and sell at the monopoly price is called a cartel.