The __________ often causes a problem with price promotions.
A) delivery of enough inventory
B) indifference of consumers
C) lack of a good promotional campaign
D) differing price elasticities of consumers and retailers
E) seasonality of a product

Question

Quizplus · Accepted Answer

Price elasticities determine how much quantity demanded will change in response to a price change. When consumers are more price sensitive than retailers, price promotions can result in stock depletion, leaving retailers with empty shelves and unable to meet demand. On the other hand, if retailers are more price sensitive than consumers, they may be reluctant to offer any price reductions, resulting in missed sales opportunities. This mismatch in price elasticities can create problems with price promotions.

The __________ Often Causes a Problem with Price Promotions