A firm wants its customers to trade-up to more expensive items. So although customers may be drawn to the company by an ad for a low-priced item, its order-getting personnel inform the customers that a more expensive model has added features, a longer warranty, and on-premises repair service. In this case, trading-up customers constitutes illegal price discrimination.

Question

Quizplus · Accepted Answer

Trading up involves persuading customers to buy a more expensive item than they originally intended, focusing on added value and benefits. It is a legal and common sales strategy, not price discrimination, which involves charging different prices to different customers without a justifiable reason.

A Firm Wants Its Customers to Trade-Up to More Expensive