Consumers Sometimes Prefer Two-Part Pricing Because

question 74

Multiple Choice

Consumers sometimes prefer two-part pricing because:

• A) prices are often perceived as quality indicators
• B) consumers like to be in control of costs
• C) consumers are uncertain about the number and types of activities that might be used at places like amusement parks
• D) consumers prefer a limited number of choices
• E) prices have little or no psychological influence on most consumers

---

Definitions:

Variable Cost

Costs that vary in total in direct proportion to changes in the level of activity or volume of output produced.

Divisional Managers

Managers who are responsible for overseeing the operations, profitability, and strategic planning of a specific division within a company.

Transfer Price

The price at which goods and services are traded between departments or subsidiaries within the same company, used for accounting and tax purposes.

Applied Fixed Overhead

Costs for fixed overhead (such as rent, salaries, and utilities) that are allocated to goods produced based on a predetermined rate.