Question

suppose that a rap group called rg2 has released its first cd with live 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 rg2s first cd.
b. the price of the cd was too expensive to begin with.
c. the markup by music stores indicates a surplus of rg2s cd on store shelves.
d. the recording label should expand the production and distribution of rg2s first cd

Explanation:

When music stores can increase the price from the intended list - price and still have strong sales, it implies that demand is high. High demand signals that the recording label should expand production and distribution to meet the market needs and increase profits.

Answer:

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