A retailer purchased a gross (144) of silk shells each costing exactly $17. Although the only difference between the shells was color, when they were put on the floor, the primary colors were marked $25, the pastel colors were marked $28, and the black-and-white shells were marked $30. These prices were set most likely because
A) retailers using a price lining strategy will occasionally mark up items based on color, style, and expected consumer demand.
B) fewer people buy black-and-white shells, so the retailer has to charge a higher price to break even.
C) the retailer is using prestige pricing; black-and-white shells are more elegant.
D) the primary colors were priced using a penetration strategy, the pastels were priced using a skimming strategy, and the black-and-white shells were priced using prestige pricing.
E) the retailer is essentially using above-, at-, and below-market pricing for the three groupings.
Correct Answer:
Verified
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