An Automobile Manufacturer Charges a Higher Price for Its "Hybrid

question 126

Multiple Choice

An automobile manufacturer charges a higher price for its "hybrid" car that runs on both electricity and gasoline than it charges for a car that runs on only gasoline. The manufacturer contends that the consumer will save money with the hybrid car in the long run because the money saved on gasoline will more than cover the price differential between the hybrid car and a regular car. This manufacturer is using:

• A) Price leadership.
• B) Price lining.
• C) Value in use pricing.
• D) Psychological pricing.
• E) Reference pricing.

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Definitions:

Stereotyping

Making generalized beliefs or assumptions about the characteristics of all members of a group, based on an image about what people in that group are like.

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