If the company hires an incompetent president to run the company. He has the opp

Question

If the company hires an incompetent president to run the company. He has the opportunity to introduce his idea for kids toys but his idea failed. He keep reducing the price of the products and eventually give out free products. As a result, the sales goes down along with the stock price that lead to takeover target by other company. Supply was more than demand. Later, the company decided to give out free sample or products, people start noticing and start using the toys. As a result, demand for toys are up and so the price increase. Is it a good idea to give free products to attract more sales or more demand?

1. Select a concept associated with Supply and Demand that is illustrated in this case

2. Use the information were given to support an economic analysis or to explain behavior of the concept you selected

3. Be sure to explain the supply and demand concept you selected being careful to distinguish between change in quantity demanded or supplied (movement along curve) versus change in demand or supply (shift of the curve) and how it applies to the particular segment you are analyzing.

Please explain your answer in detail and clearly

Explanation / Answer

answer for the above question is the concept which being followed here in this situation is PRICE DISCRIMINATION STRATEGY, where in, the price of goods are reduced to attract the buyers and to increase the sale. this is basically done when new thing is introduced in the market to check wether its feasable or not.

Prices are cut down to increase the flow of money in the market.

this can be a concept of monetary policy also. hwere the supply becomes in excess of demand and so therre no buyers to buy tat product in the market and ther fo0re. to sale out all goods the prices are rduced and some samoples are sold as a trialfree of cost.

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