Lexmark sells some of its color printers for about $100, but the refill cartridges cost over $30 each. Lexmark's pricing strategy would be best labeled as
A) bait pricing.
B) captive pricing.
C) customary pricing.
D) price lining.
E) complementary pricing.

Question

Quizplus · Accepted Answer

Lexmark's pricing strategy is an example of captive pricing, where the initial product is sold at a low price to attract customers, but the refills or additional products required for the initial product to function are priced at a higher markup. This creates a captive market for the refills as customers are locked into purchasing them from Lexmark, allowing the company to generate a higher profit margin on these products.

Lexmark Sells Some of Its Color Printers for About $100