Understanding Price Increase through Shrinkflation

The video explains how companies can increase prices without consumers noticing by reducing product size while maintaining the same price. Using a dog food example, it shows how the price per pound increases when the bag size is reduced from 40 pounds to 32 pounds, while the price remains $40. The video demonstrates the calculation of the new price per pound and the percent increase, which is 25%. This tactic results in consumers paying more per unit without an apparent price hike.

What is the term used to describe the practice of reducing the quantity of a product while keeping its price the same?

• Shrinkflation

• Deflation

• Stagflation

• Inflation

In the example provided, what was the original price per pound of the dog food?

• $1.25

• $0.80

• $1.20

• $1.00

After the bag size was reduced to 32 pounds, what was the new price per pound of the dog food?

• $1.50

• $1.00

• $1.10

• $1.25

How do you calculate the percentage increase in price per pound?

• Subtract the old price from the new price and divide by the new price

• Subtract the new price from the old price and divide by the old price

• Subtract the old price from the new price and divide by the old price

• Subtract the new price from the old price and divide by the new price

What is the percentage increase in price per pound when the bag size is reduced from 40 pounds to 32 pounds?

• 15%

• 20%

• 30%

• 25%