When Circuit Town Electronics Sets Its Televisions at Three Price

question 113

Multiple Choice

When Circuit Town Electronics sets its televisions at three price levels of $699, $899, and $1,099, it is most likely using ________.

• A) price fixing
• B) price lining
• C) penetration pricing
• D) skimming pricing
• E) loss leader pricing

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Definitions:

Marginal Revenue

The additional income generated from selling one more unit of a product or service.

Equilibrium

When aggregate demand equals aggregate supply.

MC = MR

A principle in economics stating that profit maximization occurs when a firm's marginal cost (MC) equals its marginal revenue (MR).

Marginal Revenue

The additional income gained from selling one more unit of a good or service.