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:

Cognitive Social Learning Theory

A theory suggesting that people learn from observing others, with the formation of attitudes, beliefs, and behaviors influenced by social context and experiences.

Psychoanalytic Theory

A theory developed by Freud emphasizing unconscious motivations and conflicts as the driving forces behind human behavior and mental disorders.

Modeling

The process of learning by observing and imitating the behaviors of others.

Verbal Appellation

The act of naming or labeling something using words.