The assumption that demand is elastic at a number of price points but is inelastic between these price points leads to which pricing approach?
A)product-line pricing
B)skimming pricing
C)penetration pricing
D)price lining
E)odd-even pricing

Question

Quizplus · Accepted Answer

Price lining involves setting a limited number of prices for a product line based on the assumption that demand is elastic at certain price points but inelastic between them. Customers may be willing to pay higher prices for certain features or levels of quality, but they are unlikely to switch to a different product or brand based on small price differences. Price lining allows companies to capture different segments of the market with varying levels of willingness to pay.

The Assumption That Demand Is Elastic at a Number of Price