If an increase in the price of PC Cola causes the profits of President's Choice to decrease
A)PC Cola is in a market by itself.
B)the competition bureau should prevent President's Choice from raising its prices.
C)the relevant market for PC Cola includes competitors.
D)President's Choice should cease production.

Question

Quizplus · Accepted Answer

If an increase in the price of PC Cola causes the profits of President's Choice to decrease, it suggests that PC Cola is not operating in a market by itself. Rather, it is likely facing competition from other cola brands that consumers can switch to if the prices of PC Cola becomes too high. Therefore, the relevant market for PC Cola includes competitors, and President's Choice may need to reconsider its pricing strategy to remain competitive. Option B is not necessarily the best choice because preventing price increases may not be in the best interest of promoting a competitive market. Option D is not a logical solution to address declining profits.

If an Increase in the Price of PC Cola Causes