When Gabriella Logs on to Dell's Website, She Sees a Notebook

question 65

Multiple Choice

When Gabriella logs on to Dell's website, she sees a notebook model priced well below $1,000. As she continues through the site to view the other options, she realizes the first one she saw was the cheapest model available, but she of course wants more features. Dell is utilizing

• A) bait and switch.
• B) price lining.
• C) captive pricing.
• D) penetration pricing.
• E) bait pricing.

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Definitions:

Current Liabilities

Financial obligations a company is due to pay within one year or within its operating cycle if longer than a year.

EOQ Model

Economic Order Quantity Model; a formula used to determine the optimal order quantity that minimizes total inventory costs.

Annual Ordering Cost

The total expenses associated with placing orders for goods or inventory over the course of a year.

Cost Of Borrowing

The total charge, including interest and any other fees, for obtaining funds from a lender.