In many markets, and particularly for new and innovative products or services, innovators and early adopters are willing to pay a higher price to obtain the new product or service. In this case firms would employ a price skimming strategy that sets the initial price high as opposed to a market penetration strategy that sets the initial price low. Firms employ skimming strategies to test consumers' price sensitivity. A firm that prices too high can always lower the price, but if the price is initially set too low, it is almost impossible to raise it without significant consumer resistance.
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From the information provided,calculate Giuseppe's profit margin ratio for each of the three years.Comment on the results,assuming that the industry average for the profit margin ratio is 6% for each of the three years.
Analysis comment: The profit margin has increased in all three years and has exceeded the industry average in the last two years.These results reflect positively on Giuseppe and its trend in profitability.
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What is the difference between the liability of a qualified indorser and an unqualified indorser? Does the fact that a person has given a qualified indorsement mean that the person has no liability? Explain.
A qualified indorser's contractual liability is limited in the event that the primary party defaults on the payment. An unqualified indorser's liability is not limited in the case of a default on payment by the primary party. Even though a qualified indorser limits contractual liability, she still has liability for breach of a warranty.
The tax saving attained by a firm from interest expense.
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All of the following are true of promoters of a corporation EXCEPT:
A) They solicit investors to begin the corporation. B) They prepare the formal documents of incorporation. C) They may make contracts in the name of the corporation. D) They continue to solicit capital whenever needed after incorporation.
Gibson Inc., an American apparel company, uses a rewards program for its customers who make frequent purchases. This marketing strategy can help the company:
A) standardize its products. B) reduce its production costs. C) instill brand loyalty. D) increase global branding.