A Car Dealer Advertises Free Satellite Radio for One Year

question 123

Multiple Choice

A car dealer advertises free satellite radio for one year with the purchase of a new car.This is an example of:

• A) bait and switch.
• B) marginal sales.
• C) an incentive.
• D) voluntary exchange.

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Definitions:

Price Discrimination

A pricing strategy where identical or substantially similar goods or services are sold at different prices by the same provider in different markets.

Third-degree Price Discrimination

A pricing strategy where a firm charges different prices to different groups of consumers for the same product, based on their willingness to pay.

Tennis Lessons

Instruction or training sessions focused on improving a person's skills and understanding of the game of tennis, offered by professionals or experienced players.

Producer Surplus

The discrepancy between the amount sellers are prepared to take for a product or service and the actual payment they get.