Gillette's practice of selling razors at a relatively low cost but marking up the price significantly on its blades when Gillette razors will only work with Gillette blades is an example of:
A) bundling.
B) tying.
C) marginal pricing.
D) perfect price discrimination.

Question

Quizplus · Accepted Answer

This is an example of tying, which is the practice of selling a product or service only on the condition that the buyer purchases another product or service as well. In this case, Gillette is tying its razors to its blades, forcing customers to buy Gillette blades at a marked-up price because only Gillette blades will work with Gillette razors.

Gillette's Practice of Selling Razors at a Relatively Low Cost