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: Understand the term.
The strategy mentioned involves reducing the size or quality of a product while keeping the price constant. This phenomenon is widely recognized as shrinkflation, where products shrink in size but the price remains the same.
Step 2: Examine each option.
- Option A: "Reduflation" is not a recognized economic term. - Option B: "Skimpflation" is similar but does not directly refer to reducing product size. - Option C: Correct. "Shrinkflation" is the term that accurately describes the strategy. - Option D: "Inflation" refers to the general rise in prices, not a reduction in product size. - Option E: "Deflation" refers to a decrease in prices, which is the opposite of shrinkflation.
Step 3: Conclude.
The correct term is Shrinkflation.
Final Answer: \[ \boxed{\text{C}} \]