Bundle Pricing May Be Perceived to Be of Value by Customers

question 174

Multiple Choice

Bundle pricing may be perceived to be of value by customers because

• A) they always pay a lower price per item than they would have if they bought each item separately.
• B) they prefer buying a combination of bundled products in a single transaction, which saves time, effort, and perhaps money.
• C) the companies selling the products can sell them at a lower price because their costs of packaging are lower.
• D) they are purchasing complementary products, which is convenient for them.
• E) they can purchase items that are consumed frequently in larger quantities.

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Definitions:

Normal Good

A good for which demand increases as the income of consumers increases, and decreases as the income falls.

Demand Curves

Graphs that depict the relationship between the price of a good or service and the quantity demanded for a given period, generally showing an inverse relationship.

Baby Formula

A specially formulated food designed for infants, typically made from cow's milk or soybean protein, enriched with necessary nutrients.

Price Increase

A general rise in the prices of goods and services over a period of time, decreasing purchasing power.