The price for Nintendo's Wii video game console was likely insufficient to cover its fixed and variable costs.However,the price of its video games was set high enough to cover its video game console's loss and deliver a handsome profit for the entire Nintendo product line.This example illustrates Nintendo's use of
A)bundle pricing.
B)product-line pricing.
C)price lining.
D)customary pricing.
E)loss-leader pricing.

Question

Quizplus · Accepted Answer

Nintendo's pricing strategy is product-line pricing, which involves pricing different products within a product line based on their costs, competitors' prices, and the value they provide to customers. In this case, the price of the Wii console was set lower than the cost to produce it, but the high price of Nintendo's video games made up for the loss and delivered a profit for the entire product line. This strategy incentivizes customers to purchase multiple products from the same brand, increasing revenue and profitability.

The Price for Nintendo's Wii Video Game Console Was Likely