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Answer :
Answer:
It is an example of scheduled obsolescence.
Explanation:
The new line of affordable cars does appeal to lower-income groups, however, they are not a safe long term investment.
In the industry it became common to sell low price products (that appeals to the masses) that also have low durability, thus forcing the buyer to purchase a newer model in a short amount of time.
This process takes advantage of the fact that the low-income part of the population doesn't have the means to make a long term investment on a higher quality product.
This process is called scheduled obsolescence, for its intentionally lack of durability.
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Final answer:
Luna Automobile Inc.'s creation of an affordable car lineup targeting lower income groups, while foregoing durability, is a strategic response to the business cycle and a saturated luxury market, aiming to broaden their market and maintain sales in varying economic conditions.
Explanation:
Luna Automobile Inc.'s decision to create a new line of affordable cars targeted at the lower income groups, sacrificing durability, is an example of a strategic business move in response to economic conditions and a saturated luxury car market. This strategy is influenced by the companies' perception of the business cycle, where the demand for luxury cars fluctuates with economic prosperity. During a recession, consumers tend to opt for less expensive and more economical choices. Hence, Luna is diversifying its product line to cater to a broader market and maintain sales through economic fluctuations. This business decision reflects both a response to competitive pressures and an understanding that the market demand varies with the business cycle.
