Why Would Firms Use the Practice of Tying

question 20

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:

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The shared expectations and rules that guide behavior of people within social groups.

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