Price lining occurs when a small company raises the price of all of its goods by the same percentage to cover operating expenses.

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Price lining is actually a pricing strategy where products are grouped into specific price ranges (or lines) based on their perceived value, and each price line typically has a different level of quality, features or benefits. This allows customers to choose the product that matches their needs and budget, while also giving the company flexibility to adjust prices within a specific line without affecting the others. Therefore, price lining does not necessarily involve raising prices uniformly across all products, but rather segmenting them based on their perceived value proposition.

Price Lining Occurs When a Small Company Raises the Price