While the prices for most wine brands were falling, and restaurants were canceling wine orders for bottles that cost over $25 apiece, Nickel & Nickel launched a new wine brand selling at $125 per bottle. There were already many less expensive wines on the market. Nickel & Nickel invited the sales staff of one of the largest wine distributors in the U.S. to attend a pre-release testing. This would be an example of:
A) price competition.
B) economic diversification.
C) market control.
D) nonprice competition.
E) price fixing.

Question

Quizplus · Accepted Answer

This is an example of nonprice competition because Nickel & Nickel is differentiating its product through means other than price, such as quality or branding, especially in a context where other wines are competing on price by lowering it.

While the Prices for Most Wine Brands Were Falling, and Restaurants