Most consumers expect a litre of milk to cost anywhere between $1-$3 dollars depending on if it is organic or not. Knowing this consumer expectation, a new dairy will probably charge consumers within this price range for their milk. This new dairy is engaging in:

Question

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The new dairy is using customary pricing, which is setting a price based on widely accepted consumer expectations and industry norms. In this case, the dairy is pricing their milk within the range of what consumers typically expect to pay for a litre of milk.

Most Consumers Expect a Litre of Milk to Cost Anywhere