Figure 14-3 above shows a demand curve that slopes downward and to the right,then turns back on itself to the left.Which pricing approach does Figure 14-3 depict?
A)prestige pricing
B)skimming pricing
C)penetration pricing
D)price lining
E)reflexive pricing

Question

Quizplus · Accepted Answer

The demand curve in Figure 14-3 depicts a situation where the price of a product first decreases as quantity demanded increases, and then increases as quantity demanded continues to increase. This type of demand curve is typical of products that are considered luxury or prestigious goods, where consumers are willing to pay a premium price for the reputation, quality, or status associated with the product. This pricing approach is known as prestige pricing, where price is used as a signal of quality or exclusivity. Skimming pricing involves setting a high price for a new product with limited competition, penetration pricing involves setting a low price to enter a new market, price lining involves offering different products at different price points, and reflexive pricing involves adjusting prices based on changes in demand or cost. None of these pricing approaches accurately describes the demand curve in Figure 14-3.

Figure 14-3 Above Shows a Demand Curve That Slopes Downward