Suppose that a rap grouprap group called RG 2RG2 has released its first CD with LiveLive Records at an intended list price of $14.99. Music stores have discovered that they can markup the price to $17.99 with continued strong sales. What information does this higher price convey to the recording label?

A. The recording label should cut back on the production and distribution of RG 2RG2 's first CD.

B. The price of the CD was too expensive to begin with.

C. The markup by music stores indicates a surplus of RG 2RG2 's CD on store shelves.

D. The recording label should expand the production and distribution of RG 2RG2 's first CD.

Question

April

Business

6 October, 19:39

Suppose that a rap grouprap group called RG 2RG2 has released its first CD with LiveLive Records at an intended list price of $14.99. Music stores have discovered that they can markup the price to $17.99 with continued strong sales. What information does this higher price convey to the recording label?

A. The recording label should cut back on the production and distribution of RG 2RG2 's first CD.

B. The price of the CD was too expensive to begin with.

C. The markup by music stores indicates a surplus of RG 2RG2 's CD on store shelves.

D. The recording label should expand the production and distribution of RG 2RG2 's first CD.

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Answers (1)

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Walter Skinner · Answer 1

D) The recording label should expand the production and distribution of RG 2RG2 's first CD.

Explanation:

According to the law of supply and demand, since the customers are willing to pay a price higher than equilibrium price, that means that their is a shortage of the product or service and that the supply should increase in order to get the price back to equilibrium price.