Which of the Following Companies Uses Captive Product Pricing

question 163

Multiple Choice

Which of the following companies uses captive product pricing?

• A) Photo Genie, which sells inexpensive cameras that run only on their own expensive batteries
• B) Go Zone, which launched a range of tablet models, each priced according to its features
• C) Penguin's Parlor, which offers customers a 20-percent discount on their birthdays
• D) Sportsprint, which prices sports equipment according to customer evaluations
• E) Burger Den, whose combo meals are priced lower than its individual components sold together

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Definitions:

Shutdown Point

The level of operations at which a company or business does not generate enough revenue to cover its variable costs, leading to a temporary or permanent closure.

AVC (Average Variable Cost)

The total variable costs (costs that vary with the level of output) divided by the quantity of output produced, representing the variable cost per unit.

MC (Marginal Cost)

The rise in overall expenses associated with the production of an extra unit of a product or service.

Break-Even Point

The level of production or sales at which total revenues equal total costs, resulting in no profit or loss.