Alex's Knot Shop Prices Its Ties at $5 Intervals from $10

question 245

Multiple Choice

Alex's Knot Shop prices its ties at $5 intervals from $10 to $25 because most customers find these prices appealing and easier to compare. This is:

• A) prestige pricing.
• B) penetration pricing.
• C) price lining.
• D) odd-even pricing.
• E) value in use pricing.

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Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was acquired, used to reduce the asset's book value over time.

Intangible Assets

Non-physical assets that provide economic benefits to a company, such as patents, trademarks, goodwill, and copyrights.

Issuance of Bond

The process through which a bond is created and sold to investors, thus raising capital for the issuer.

Financing Activities

Transactions that result in changes to the size and composition of the equity capital or borrowings of an entity.