________ Is a Pricing Tactic a Firm Uses for Two

question 56

Multiple Choice

________ is a pricing tactic a firm uses for two products that work only when used together. The firm sells one item at a very low price and then makes its profit on the second high-margin item.

• A) Two-part pricing
• B) Price bundling
• C) Captive pricing
• D) Decoy pricing
• E) Keystoning

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Definitions:

Product Costs

The direct and indirect costs incurred in producing a product, including materials, labor, and overhead expenses.

Inventoriable Costs

Costs associated with the production of goods that are capitalized as inventory on the balance sheet until the goods are sold.

Cost Concepts

Fundamental ideas that underlie the recording, classification, and reporting of costs in the context of accounting and finance.

Cost Classifications

The categorization of costs based on their characteristics, such as by behavior, purpose, or relevance to decision making.