Different Brands Within a Company's Product Line Generally Have Different

question 135

Multiple Choice

Different brands within a company's product line generally have different profit margins; higher price lines have higher profit margins. For example, Nike Variety tennis shoes have variable costs of $6 and sell for $24; whereas, Nike Wimbledon tennis shoes have variable costs of $10 and sell for $48. It must be true that:

• A)Nike is using a cost-plus percentage-of-cost pricing strategy.
• B)demand is unrelated to product quality.
• C)Nike is using a price lining strategy.
• D)demand is unrelated to price.