Selling the same product under different brand names allows a firm to price discriminate as long as
A) customers know the products are identical.
B) customers do not know the products are identical.
C) the products really are not the same.
D) the firm lets customers know that the products are identical.

Question

Quizplus · Accepted Answer

Selling the same product under different brand names can allow a firm to price discriminate by targeting different segments of customers with different price points. This strategy works best when customers are not aware that the products are identical, as they may be willing to pay a higher price for a brand that they perceive to be of higher quality or status. If customers know the products are identical, they may be less willing to pay a higher price, thus reducing the effectiveness of price discrimination.

Selling the Same Product Under Different Brand Names Allows a Firm