Consider the Tostitos Products Photo Above

question 252

Multiple Choice

Consider the Tostitos products photo above.Frito-Lay recognizes that its tortilla chip products are partial substitutes for one another.Its bean and cheese dips and salsa sauces complement its tortilla chips.Frito-Lay uses this knowledge to set prices for each item in order to ensure that the entire line is profitable.This pricing strategy is known as

• A)bundle pricing.
• B)price lining.
• C)customary pricing.
• D)product-line pricing.
• E)loss-leader pricing.

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Definitions:

Utility Function

Mathematical representation of a consumer's preference ranking for a set of goods and services.

Budget Equation

A balance formula that represents the relationship between income, expenses, and savings within a specified period.

Entry Fee

A charge that must be paid to gain access to a particular service, activity, or location.

Consumption

Refers to the act of using goods and services to satisfy needs and wants.