c. the lost-cost item in the line in terms of quality and features.
d. the profit leader for the rest of the product line.
e. the traffic builder designed to capture the attention of hesitant or first-time buyers.
Answer:
A retailer purchased a gross of silk shells each costing exactly $17 apiece. Although the
only difference between the shells was color, when they were put on the floor, the
primary colors were marked $25, the pastel colors were marked $28, and the
black-and-white shells were marked $30. These prices were set most likely because
a. retailers using a price lining strategy will occasionally mark up items based on color,
style, and expected consumer demand.
b. fewer people buy black-and-white shells, so the retailer has to charge a higher price
to break even.
c. the retailer is using prestige pricing; black-and-white shells are more elegant.
d. the primary colors were priced using a penetration strategy, the pastels were priced
using a skimming strategy, and the black-and-white shells were priced using prestige
pricing.
e. price lining is essentially the same as above-, at-, or below market pricing.
Answer: