Zohaib bhai or any other bhais.please help me in ECO :(

[Sijan92]

11 Sometimes travel companies advertise holidays at prices below cost.
What might be a reason for this?
A an excess demand for holidays
B an excess supply of holidays
C a price inelastic demand for holidays
D insufficient competition in the holiday market

 

[Zohaib Sherazi]

B. Owing to a high amount of competition they adopt a low pricing strategy to increase their market share.

 

[Sijan92]

what does advertise holidays at lower price means? does this means the cost of their advertisement fell or what???

 

[Zohaib Sherazi]

They advertised the lower price of their holidays. It does not refer to the cost of advertising here.

 

[Sijan92]

thanks zohaib bhai. can you please also help me on q 29 p1 07oct. sorry i cudnt post it here as the question contained a table.

 

[Zohaib Sherazi]

Rise in prices depend on the rate of inflation which is lowest in the case of Belgium. Likewise growth is shown by a rising GDP. Since, % change in GDP although positive but lowest in the case of Belgium. Therefore, Belgium "B".