A demand-related difficulty with a retailer utilizing loss leaders is that it affects _____.
A)variable markups
B)prestige pricing
C)legal provisions
D)price-floor pricing

Question

Quizplus · Accepted Answer

Loss leaders, which are products sold at or below cost to attract customers, can create a problem with prestige pricing, which is when a retailer sets higher prices to give the impression of offering higher quality products or services. Customers may be less willing to pay higher prices for other products if they believe that the retailer regularly offers low prices or loss leaders. This can undermine the effectiveness of prestige pricing strategies. On the other hand, loss leaders do not necessarily affect variable markups, legal provisions or price-floor pricing.

A Demand-Related Difficulty with a Retailer Utilizing Loss Leaders Is