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ivanzaharov [21]
3 years ago
6

When pricing​ automobiles, American car companies typically charge a much higher percentage markup over cost for​ "luxury option

" items​ (such as leather​ trim, etc.) than for the car itself or for more​ "basic" options such as power steering and automatic transmission. Explain why.
Business
1 answer:
irga5000 [103]3 years ago
8 0

Answer:

The essential instance of third degree value separation. By offering "extravagance' and "essential" alternatives, the producer can partition the buyers into two separate gatherings. Buyers settling on the extravagance alternative are basically individuals who are less touchy to value changes (less versatile interest) contrasted with customers who might decide on fundamental choices.  

This distinction sought after flexibility permits the producer to charge a more significant expense to the customers of the extravagance bunch contrasted with those in the essential gathering.

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