A Single Jar of Original Formula Carmex Has Different Prices

question 243

Multiple Choice

A single jar of original formula Carmex has different prices for the product depending upon where it is sold, but each price will end in a nine ($0.99 at mass merchandisers like Walmart or Target, and between $1.59 and $1.79 in drug and food retailers such as Walgreens and Kroger) . This pricing strategy is called

• A) standard pricing.
• B) odd-even pricing.
• C) customary pricing.
• D) everyday lower pricing.
• E) at-market pricing.

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Definitions:

Intertemporal Price Discrimination

A pricing strategy where a seller changes prices over time for the same product or service to different consumers, aiming to maximize profits by targeting price sensitivity at different time periods.

Cellular Phone

A wireless handheld device that allows users to make and receive calls and access data services over a cellular network.

Price Discrimination

The practice of selling the same product to different customers at different prices for reasons not associated with cost differences.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing the benefit to consumers.