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Author Question: Wal-Mart and other discounters and category specialists in the European Union are constantly ... (Read 34 times)

frankwu

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on: Jun 29, 2018
Wal-Mart and other discounters and category specialists in the European Union are constantly scrutinized and often pressured by local authorities to raise prices. This is an example of
 a. price controls c. a tariff
  b. countervailing duty actions d. differential exchange rates

Question 2

Why should a manufacturer not use even pricing in Turkey?
 a. Even numbers are considered to be unlucky.
  b. Even pricing indicates a cheap product.
  c. Retailers can't keep the change if the product is priced using even pricing.
  d. It is harder to adjust even pricing in inflationary markets.


essyface1

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Reply #1 on: Jun 29, 2018
Answer to Question 1

A
This is an example of a price control used to increase the price of imports. E.U. governments charge that these international retailers price products below cost to drive out smaller competitors. Countervailing duty actions are usually product specific. Because this is an example of a nontariff barrier it is not an example of a tariff. The protectionist measure has nothing to do with exchange rates in this case.

Answer to Question 2

C
In Turkey it is customary for retailers to keep the change in a retail transaction. In that environment, a company using even pricing, regardless of whether or not it is pricing below competitors' price, will be at a disadvantage since retailers will choose to sell competitors' products.


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