When the Swiss Watchmaker TAG Heuer Raised the Average Price

question 318

Multiple Choice

When the Swiss watchmaker TAG Heuer raised the average price of its watches from $250 to $1,000, its sales volume jumped sevenfold. The likely cause of this volume increase is

• A)because the watch market is highly conservative.
• B)because economies of scale in production would be substantial.
• C)because retailers are not willing to carry new brands of watches in this category.
• D)because once the initial price is set, it is nearly impossible to lower the price without alienating early buyers.
• E)because watches in this category have an element of prestige pricing, so that lower prices may result in lower sales.

---

Definitions:

Psychological Disorders

Mental health conditions characterized by significant disturbances in thoughts, feelings, and behaviors.

Therapy

A treatment method aimed at relieving or healing psychological disorders, physical disorders, or illnesses.

Modus Operandi

A particular way or method of doing something, especially one that is characteristic or well-established.

Treatment

Interventions designed to alleviate symptoms, cure illness, or improve health and well-being in a targeted condition.