Question

Which of the following is true of optional-product pricing? Question 11 options: 1) It involves setting geographically specific prices. 2) It involves pricing products that can be added to the base product. 3) It is used to price products that must be used with the company's main product. 4) It involves capitalizing on low value by-products. 5) It is used to price a company's main product.

Answer 1

Answer: 2) It involves pricing products that can be added to the base product.

Explanation:

Optional-product planning is a method of pricing where the producer lure buyers in by selling at a cheap price which can sometimes even fall below their cost price. These products however can not be fully utilized alone or as they are. They require accessories.

This is where the company hopes to make up the profit. They charge low on the main product, then hope to make up the cost when you buy the accessories. An example would be Printers and ink.

This is a risky method of selling and so needs the accessories to be priced in such a way that the company makes no losses.