Hotline Long Distance Service uses captive-product pricing for its phone call charges.Because this is a service,the price is broken into a fixed rate plus a per-call ________.
A)fixed rate usage
B)variable usage rate
C)standard usage rate
D)market usage rate
E)fixed fee

Question

Quizplus · Accepted Answer

Captive-product pricing involves offering a product/service at a low price or even for free, with the intent of profiting from the sale of accompanying products/services. In the case of Hotline Long Distance Service, the phone call charges consist of a fixed rate (the captive product) and a variable usage rate (per-call charge) that directly depends on the consumption of the service. Therefore, option B, the variable usage rate, is the best choice.

Hotline Long Distance Service Uses Captive-Product Pricing for Its Phone