Why Would Firms Use the Practice of Tying

question 52

Multiple Choice

Why would firms use the practice of tying?

• A) It allows firms to tie goods that are highly valued together with goods that are not highly valued, hence increasing profits for firms.
• B) It is a way to force consumers to buy more than what they would without tying.
• C) It is a subtle way to raise prices for those consumers who have a low willingness to pay.
• D) It is a subtle way to charge higher prices to those consumers with a high willingness to pay, and a lower price to consumers with a low willingness to pay.

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Definitions:

Human Resources

The department within an organization that deals with the hiring, administration, and training of personnel.

Screening Job Candidates

The process of evaluating potential employees to determine their suitability for a particular position.

Recruitment Advertising

Utilizing different media platforms to post job openings aimed at attracting a wide range of candidates; a rephrased definition for Employment Advertising.

Pay Grade

A level within a pay structure that determines the range of salary amounts that an employee can earn in a particular position.