When AT&T Attracts Residential Customers by Setting One Monthly Fee

question 268

Multiple Choice

When AT&T attracts residential customers by setting one monthly fee for high-speed Internet, cable TV, and long-distance phone services that is $40 less than the price of purchasing these three services separately, this is an example of:

• A) Reference price
• B) Price line
• C) Bundle price
• D) Leader price
• E) Demand-backward price

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Definitions:

Licensing

A process where a company allows another to use its intellectual property or technology in exchange for a fee or royalty.

Royalties

A share of the income of a business paid by a franchisee to the franchisor.

Innovation

The act of introducing something new, such as an idea, method, or device, to improve processes, products, or services.

C Corporation

An organizational form for businesses where shareholders, the owners, face taxation independently from the corporation.