Question

Which term is commonly used to describe the strategy employed by firms where they reduce the product size or quality while maintaining the same price?

• A. Reduflation
• B. Skimpflation
• C. Shrinkflation
• D. Inflation
• E. Deflation

Hint:

Shrinkflation is common in industries like food and beverages, where packaging may shrink, but the price stays the same.

Answer 1

The Correct Option is C

Step 1: Define the concept.
The described strategy entails decreasing a product's volume or quality while maintaining its original price. This is commonly known as shrinkflation, a practice where products are reduced in size but sold at the same cost.
Step 2: Evaluate each option.
- Option A: "Reduflation" lacks recognition as an economic term. - Option B: "Skimpflation" is related but does not specifically denote a reduction in product size. - Option C: Correct. "Shrinkflation" is the accurate term for this strategy. - Option D: "Inflation" signifies a general price increase, not a decrease in product size. - Option E: "Deflation" refers to a general price decrease, which is the inverse of shrinkflation.
Step 3: Determine the answer.
The appropriate term is Shrinkflation.
Final Answer: \[\boxed{\text{C}}\]