how will a drastic fall in the price of necklaces affect the quantity if necklaces that rachel supplies? explain your answer

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Adrianna Knox

Today, 02:58

how will a drastic fall in the price of necklaces affect the quantity if necklaces that rachel supplies? explain your answer

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Mireya Hogan · Answer 1

if the prices get to cheap she won't have enough money to keep making new necklaces and she won't be able to produce them.

Harris · Answer 2

Price and quality are positively correlated. The price of a product is a good indicator of its quality. You always have to pay a bit more for the best. The marketing literature has addressed the use of price as a surrogate for quality as a decision-making heuristic. That is; the higher the price, the higher the quality.

Hence, a drastic fall in the price of a necklace indicates a drastic fall in it's quality.