Mr. Perez wants to sell more of his product as he plans on expanding his business. In the market, there are a lot of competing firms selling the same product as him. If he fails to sell more of his product then his firm would face losses, so he decides to reduce the price of the product. The statements above, if true, best support which of the following assertions?

Question

Mr. Perez wants to sell more of his product as he plans on expanding his business. In the market, there are a lot of competing firms selling the same product as him. If he fails to sell more of his product then his firm would face losses, so he decides to reduce the price of the product. The statements above, if true, best support which of the following assertions?

Mr. Perez’s product is worse in quality but costlier than the other firms’ products.
Reducing the price would make his product cheaper than that of the other firms and attract more customers.
His product could not be made any different, so he had to resort to reducing the price.
Mr. Perez does not care about the money as long as his product is being sold.
The product that he is selling is very different from that of the other firms and so it needs to be cheaper.

LohaHridoy

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2025-01-04 04:42

1 Answers

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AhmedNazir · Accepted Answer · 2022-09-04T04:29:57+06:00

Option 2 : Reducing the price would make his product cheaper than that of the other firms and attract more customers.

We can conclude that Mr. Perez is selling the same product as the other firms and he had to reduce the price to sell more of it. Option 1 and 5 make assumptions that we know nothing about from the statement. Option 3 is irrelevant to the statement, as there is no need to make the product different and so is Option 4, as it comments on the behaviour of Mr. Perez. Clearly, Mr. Perez has to reduce the price to sell more as the other firms are also selling the same product; reducing the price would attract more customers to his firm which is given in Option 2. Hence, option 2 is the correct solution.