Research Has Shown That an Isolation Effect Occurs with Consumers

question 19

Multiple Choice

Research has shown that an isolation effect occurs with consumers, meaning that an alternative is less attractive when viewed alone than when viewed alongside other alternatives.Which pricing strategy takes this effect into consideration?

• A)Everyday low prices
• B)Bundle pricing
• C)Reference pricing
• D)Prestige pricing
• E)Odd-even pricing

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Definitions:

Total Product Curve

A graphical representation of the production function, showing how the quantity of output depends on the quantity of the variable input for a given quantity of the fixed input.

Fixed Input

An input whose quantity is fixed for a period of time and cannot be varied (for example, land).

Capital

Resources, including finances and assets, used by businesses to fund their operations and investments.

Variable Input

An input whose quantity the firm can vary at any time to increase or decrease production.