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

Question

Quizplus · Accepted Answer

Captive pricing involves selling a product at a lower price and then charging a higher price for additional parts, supplies or accessories that are essential for using the product. In this case, HP is selling their color printers at a relatively low price of $100, but the refill cartridges are priced at over $30 each, which is essential for using the printer. This pricing strategy aims to capture customers by making the entry cost low, but making profits on the recurring purchases of the refill cartridges. Therefore, the best choice is B) captive pricing.

HP Sells Some of Its Color Printers for About $100