C. Sell your product at a higher price to retailers.
This strategy would allow the firm to capture some of the additional profits that the surge in popularity is generating. By increasing the price of the product, the firm can increase its revenue per unit sold and maximize its profits. However, the firm should be cautious not to price the product too high as this could discourage demand and lead to a decrease in sales in the long run.
Within a single day, the popularity of a product rises to such a degree that the inventories of retailers are completely emptied of the product as consumers rush to purchase every available unit. You are the manager of a firm that produces this product, producing at profit-maximizing output prior to the surge in popularity. What would be an economically sound strategy for you to follow if you are acting in your self-interest?
A.Reduce your firm's output.
B. Maintain current pricing.
C.Sell your product at a higher price to retailers.
D. Sell your product at a lower price to retailers.
1 answer