A car manufacturer offers cars in the luxury segment.It establishes a price floor and a price ceiling for its entire line of cars and then sets a few other price points in between to represent distinct differences in quality.It helps the manufacturer to satisfy a wide range of tastes and budgets.This is an example of:
A)markdown.
B)price bundling.
C)price lining.
D)leader pricing.
E)listing allowance.

Question

Quizplus · Accepted Answer

This is an example of price lining, where the manufacturer establishes a range of prices for different quality levels of its products to satisfy a wide range of customer preferences and budgets. Markdown refers to reducing prices of products that are not selling well, price bundling is grouping several products together and selling them at a single price, leader pricing refers to offering a product at a very low price to attract customers, and listing allowance is a fee paid by manufacturers to retailers for listing their products. None of these concepts apply to the given scenario.

A Car Manufacturer Offers Cars in the Luxury Segment