Lexmark Sells Some of Its Color Printers for About $100

question 196

Multiple Choice

Lexmark sells some of its color printers for about $100, but the refill cartridges cost over $30 each. Lexmark's pricing strategy would be best labeled as

• A) odd-number pricing.
• B) captive pricing.
• C) customary pricing.
• D) price lining.
• E) complementary pricing.

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Definitions:

Warehouse Space

The area available in a warehouse for the storage of goods, products, or materials.

Marginal Cost Curves

Graphical representations that show how the cost of producing one additional unit of a good varies as the quantity of output produced changes.

Profit Maximizers

Refers to firms or individuals who alter their production or operational levels to achieve the highest possible profit margins.

Lump Sum Subsidy

A fixed amount of money provided by the government or a body to support a business or market, which does not change with the level of output.