Question 1

Match the illegal pricing strategy with the correct term:
-Advertising items at a low price, then telling customers the item is out of stock with the goal of persuading them to purchase a more expensive model.
A) price discrimination
B) resale price maintenance
C) price fixing
D) deceptive pricing
E) predatory pricing
F) dumping
G) bait-and-switch
H) price confusion

Accepted Answer

The described strategy is known as "bait-and-switch," where a seller advertises a product at a low price to attract customers and then tries to sell them a more expensive item.

Question 2

Match the illegal pricing strategy with the correct term:
-Agreement among channel members at the same level in the channel of distribution to charge the same price to all customers.
A) price discrimination
B) resale price maintenance
C) price fixing
D) deceptive pricing
E) predatory pricing
F) dumping
G) bait-and-switch
H) price confusion

Accepted Answer

Price fixing is an illegal agreement among competitors to charge the same price, which is what is described in the scenario.

Question 3

Match the illegal pricing strategy with the correct term:
-Pricing strategies used to eliminate small competitors and to deceive consumers.
A) price discrimination
B) resale price maintenance
C) price fixing
D) deceptive pricing
E) predatory pricing
F) dumping
G) bait-and-switch
H) price confusion

Accepted Answer

Predatory pricing is an illegal pricing strategy used to eliminate small competitors by selling products below cost in order to drive them out of business.

Question 4

Match the illegal pricing strategy with the correct term:
-Strategy used by sellers who state prices or price savings that may mislead consumers or that are not available to consumers.
A) price discrimination
B) resale price maintenance
C) price fixing
D) deceptive pricing
E) predatory pricing
F) dumping
G) bait-and-switch
H) price confusion

Accepted Answer

Deceptive pricing involves sellers stating prices or price savings that mislead consumers or are not actually available, making it an illegal pricing strategy.

Question 5

What is the difference between a penetration pricing strategy and a skimming pricing strategy? What is the goal of each?

Accepted Answer

The answer of What is the difference between a penetration...

Question 6

What is the price elasticity of demand if the price of a product is increased from $5.00 to $5.50 and the change in demand goes from 700 units before the price change to 560 after the change in price? Is the demand curve elastic or inelastic?

Accepted Answer