Getaway Spas wants to prevent Relax with Us from entering the luxury spa market. If Getaway Spas advertises that it will always undercut any competitor's price, the effect of advertising ______Getaway Spas' profits due to its cost and _______ Getaway Spas' profits due to a(n)______
In its demand.
A)decreases; decreases; increase
B)decreases; increases; increase
C)decreases; decreases; decrease
D)increases; increases; increase

Question

Quizplus · Accepted Answer

Advertising decreases Getaway Spas' profits due to its cost, but it increases profits due to an increase in demand as it attracts more customers by promising lower prices.

Getaway Spas Wants to Prevent Relax with Us from Entering