Consider the following statements:1.Greedflation refers to a price rise introduced by companies to take advantage of inflation while Shrinkflation refers to a reduction in the quantity or quality of a product while the price remains the same.2.In Greedflation, production costs increase to a lesser extent while e-commerce businesses maintain the same retail price.Select the correct statements using the codes given below:

Q. Consider the following statements:
1.Greedflation refers to a price rise introduced by companies to take advantage of inflation while Shrinkflation refers to a reduction in the quantity or quality of a product while the price remains the same.
2.In Greedflation, production costs increase to a lesser extent while e-commerce businesses maintain the same retail price..
Select the correct statements using the codes given below:

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: A

Notes:

Explanation –

Statement 1 is correct. Greedflation refers to a price rise introduced by companies to take advantage of inflation while Shrinkflation refers to a reduction in the quantity or quality of a product while the price remains the same.

Statement 2 is incorrect. In shrinkflation, production costs increase to a lesser extent while e-commerce businesses maintain the same retail price whereas in greedflation, production costs usually do not rise enough for price increases to be justified.

Source: ForumIAS

Post-Mains Strategy Session by Mr. Ayush Sinha | ForumIAS