When Volkswagen first sold their Jetta TDI vehicles,they were manufacturing them in lots of 10,000.After realizing the high demand for the vehicle,they increased their manufacturing volume to lots of 25,000,and,in-turn,lowered the price of the vehicle by $2,500,because of increased efficiencies calculated by manufacturing more.By selling at a lower price,Volkswagen is engaging in:

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Experience curve pricing involves lowering the price of a product as more units are produced, due to increased efficiencies gained through experience. This is exactly what Volkswagen did when they increased their manufacturing volume and lowered the price of their Jetta TDI vehicles by $2,500.

When Volkswagen First Sold Their Jetta TDI Vehicles,they Were Manufacturing